Japanese Prime Minister Shinzo Abe gives the outline of a new stimulus package his government will compile next week to reflate a flagging economy. At $265 billion, it's bigger than expected and could put pressure on the Bank of Japan for further monetary easing. David Pollard reports.
Markets were already looking for a big bazooka from the Bank of Japan. In the event, the first shot has come from the Japanese prime minister. Forward notice of a 28 trillion yen - 265 billion dollar - stimulus package. (SOUNDBITE) (Japanese) JAPANESE PRIME MINISTER, SHINZO ABE, SAYING: "This new plan will need to support domestic demand and ensure that the economy returns growth." Full details are to come next week. Already though - at nearly 6 per cent of GDP - it's being hailed as more than hoped for. And puts pressure on the Bank of Japan to take its turn - with a sharp round of monetary easing - when it meets later this week. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "For the first time we seem to be getting coordination between the Bank of Japan and the Japanese government. It's a welcome surprise to be honest, because what we had previously was monetary policy and fiscal policy working against each other, most famously a couple of years ago with the botched introduction of a the sales tax." Markets liked Abe's words - the Nikkei closed two per cent up, stocks across the region settling near one-year highs.