Japan set for $150 bn stimulus spending

Japan's ruling party today approved a record stimulus spending plan of more than $150 billion to rescue Asia's biggest economy as fresh data revealed an unexpected boost in manufacturing.

The 15.4 trillion yen injection -- about three percent of economic output -- would be part of a wider package worth over 56.8 trillion yen ($570 billion), when tax cuts, loan guarantees and other measures are included.

Prime Minister Taro Aso was this week expected to announce the stimulus plan, which includes money for solar power generation, payments for laid off non-permanent workers, and new spending on medical and nursing care.

The package will also see more than two trillion yen spent on kicking off a  "low-carbon revolution" promoting solar power use, energy-saving vehicles and consumer electronics, a ruling party panel said.
  
It would also raise the tax-free amount of money parents can give to their children as gifts -- a bid to tap the substantial savings of Japan's growing elderly population to boost residential property purchases.
  
The report said that after the asset bubble burst in the early 1990s, "the Japanese economy staged an export-led 'single-engine' recovery that assumed the world economy will continue high growth."