Saturday, Dec. 13, 2008

By MASAMI ITO

Staff writer

Prime Minister Taro Aso unveiled a ¥23 trillion stimulus package Friday that will allow up to ¥12 trillion in public funds to be injected into financial institutions, far more than the ¥2 trillion initially planned.

During a news conference Friday evening, Aso added that the next ordinary Diet session will convene Jan. 5, an unusually early date, in order to pass the second extra budget for fiscal 2008 and the budget for fiscal 2009 as soon as possible. The stimulus package will be financed by these budgets.

"The financial crisis triggered by the United States is beginning to affect the actual economy with unusual speed," Aso said. The government "has taken measures to prioritize the security of people's lives and financial stability, but the recession has worsened beyond our imagination."

The focus of the latest stimulus package is on employment issues and corporate financing, Aso said.

The additional measures are aimed at helping protect people's livelihoods amid the global financial crisis and deteriorating job market.

The ¥23 trillion package includes a ¥6 trillion measure for people's livelihoods that Aso had announced in October, an additional ¥1 trillion to help people find or keep jobs, and another ¥1 trillion for local governments so they can provide employment subsidies. Further elaboration was not provided.

Aso also said the government will set aside ¥1 trillion for a new reserve fund for financial emergencies. The Cabinet has agreed "to take bold action with mobility and flexibility in the face of a drastic change in the global economic and financial situation," he said. "I would like to create a new reserve fund to prepare for the unexpected in the future."

The package also includes ¥3 trillion for government-affiliated financial institutions like the state-backed Japan Finance Corporation to buy corporate short-term debt to assist companies in raising capital.

"This great international depression is said to be one in 100 years, and Japan cannot escape this tsunami" phenomenon, Aso said. "But with appropriate measures taken without delay, I think it is possible to keep the damage at a minimum."

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