"We are yet to see any light out of this recession tunnel," said Takiji Okubo"
- Takiji Okubo, principal at Japan Macro Advisors
The Japanese government approved another stimulus package in order to support flagging economy, which becomes a key issue in the upcoming December general elections. The cabinet announced that it would tap reserve funds to spend 880bn yen ($10.7bn; £6.7bn) mainly to create employment and support small businesses. This is already the second stimulus package in a little more than a month, as existing Prime Minister Yoshihiko Noda is ready to do or say whatever it takes to win re-election. The government expects that the package would lift Japanese economy by around 0.2%, analysts, however, think the stimulus is unlikely to improve economic conditions.
"The total size is not enough to really boost gross domestic product, especially for early next year," said Junko Nishioka from RBS Japan Securities.
"Taken together with steady forecast for November and December, the data showed that the economy is likely to have bottomed out earlier than expected," said Tatsushi Shikano, from Mitsubishi UFJ Morgan Stanley Securities in Tokyo.
"We are yet to see any light out of this recession tunnel," said Takiji Okubo, principal at Japan Macro Advisors, a Tokyo consultancy.
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