"The Japanese economy is in a state of stagnation or recession"
- Masamichi Adachi, a senior economist at JPMorgan Securities
Japanese government plans to introduce another round of quantitative easing by the end of next month in order to remedy signs of a slowdown in the recovery pace. Government can use about 1.3 trillion yen ($17 billion) in reserves from the budget for this year and use this cash to bolster energy and environment-related industries.
"The Japanese economy is in a state of stagnation or recession," said Masamichi Adachi, a senior economist at JPMorgan Securities in Tokyo and a former central bank official. "Policy makers in this country should provide some stimulus."
"It is not clear what he (Prime Minister Noda) is speaking about," said Daniel Katzive, currency strategist at Credit Suisse in New York. "He could be talking about more measures to support exports or the effects of yen appreciation on exporters."
The Nikkei 225 Stock Average advanced 2.00 per cent, or 176.31 points, to 8,982.86. The broader Topix Index rose 1.69 per cent, or 12.51 points, to 752.30.
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