Japan unveils $200 billion in new spending to ease inflation pain

Japan said on Friday it would spend $200 billion on an economic stimulus package meant to tame inflation and cushion the economic blow from rising raw material costs.

The government’s announcement came hours after the central bank kept interest rates ultra-low, a double-barrelled signal that Tokyo will continue pouring massive fiscal and monetary stimulus into the world’s third-biggest economy while other economies are tightening policy.

Fiscal spending under the package will total 39 trillion yen ($260 billion), funded by an extra budget of 29.6 trillion yen ($201 billion). The spending is expected to boost growth by 4.6 per cent.