The Japanese government has announced a fresh stimulus package worth over USD1tn that will include in large part direct spending aimed at helping support and cushion the ongoing economic downturn from the pandemic. The supplementary stimulus is in addition to the USD1.1tn announced last month. The total amount Japan intends to spend to combat the virus will be about 40% of GDP.
Shinzo Abe, the Prime Minister, stated: ‘We must protect business and employment by any means in the face of the tough road ahead. We must also take all necessary measures to prepare for another wave of epidemic’. The direct spending section of the package will include steps to help struggling firms, increasing medical spending and continued support to companies hit by slumping sales.
To fund the additional stimulus, Japan will issue approximately JPY32bn in government bonds under the second supplementary budget for the current fiscal year ending in March 2021. In this second budget, the government will also set aside JPY10bn in reserves that can be accessed for emergency spending.
Also, the war of words between Australia and China continued to intensify after China’s Global Times, a state media outlet, described Australia as a ‘giant kangaroo that serves as a dog of the U.S’. The insult comes after the newspaper had already said that it believes its southern neighbour is ‘chewing gum stuck on the sole of China's shoes’. As insults go, they are certainly unique. It’s a far cry from 2014, when the Chinese President Xi Jinping received a standing ovation when he delivered a speech to the Australian parliament in which he said both nations should sign a free trade deal, deepen political trust and expand co-operation.