Japanese Prime Minister Shinzo Abe's cabinet has approved 13.5 trillion yen ($132.04 billion) in fiscal measures as part of efforts to revive the flagging economy, with cash payouts to low-income earners and infrastructure spending. As David Pollard reports, the package comes amid growing concerns that Japan's monetary policy has reached its limits.
Getting people to spend in a country famed for its savings mentality ... It's perhaps one challenge behind Japan's new 13.5 trillion yen fiscal package. 132 billion dollars of measures to revive a flagging economy - including cash payouts to those on low incomes. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "They are looking to increase some consumer spending, hence the boost to low-income earners. They are also looking to boost infrastructure, which in normal circumstances would bring more jobs and therefore potentially more earnings going into their GDP growth. But this has been a low-growth story now for a number of decades." Cabinet approval came after last week's Bank of Japan policy easing fell short of expectations. That putting the onus on the government to take a more direct role ... Especially, according to the chief cabinet secretary, after the ruling bloc's strong showing in last month's parliamentary elections. The Bank of Japan itself caught in a spiral of doubt over whether it has viable stimulus tools left - on top of negative interest rates - and an already massive QE programme. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "Japan is very much throwing the kitchen sink at its economy at the moment ... Needless to say, any such stimulus measures do take anything up to 9 months to a year to actually take hold and become effective so it's going to continue to be a waiting game." The next thing markets are waiting for: a September review of BoJ policy. Governor Kuroda says it won't lead to weaker stimulus. And so-called 'helicopter money' - where the central bank prints money for government spending - is seen by some as one option still on the table.