Japan’s government mulls further policy stimulus

JAPAN’S government will consider further stimulus steps, potentially making it the first developed country to turn to additional fiscal spending since the global crisis, as a strengthening yen threatens its faltering recovery.

But the additional stimulus is expected to be relatively modest and is likely to involve reallocating funds rather than new spending.

The government will start to debate stimulus steps on Friday, economics minister Satoshi Arai was quoted as saying by Jiji news agency yesterday.

The government debate may precede a meeting between Prime Minister Naoto Kan and Bank of Japan governor Masaaki Shirakawa, which a government source said is expected to be held next Monday.