Japan's cabinet approves 28.1 trillion yen stimulus package

The Japanese cabinet approved an economic stimulus package worth 28.1 trillion yen (274 billion U.S. dollars) on Tuesday to support Japan's sluggish economy in the wake of Britain's decision to leave the European Union.

The package was approved at an extraordinary cabinet meeting Tuesday after the Bank of Japan decided to take additional monetary easing at a policy meeting last week.

The package includes additional expenditure by the state and local governments totaling 7.5 trillion yen, among which 1.7 trillion yen will be allocated to building infrastructure to boost tourism and agriculture, and 2.5 trillion yen to enhancing welfare such as nursing care and childcare.

The government will also allocate 2.7 trillion yen to rebuilding areas hit by massive earthquakes in 2011 as well as in April. Another 600 billion yen will be used to help small and medium-sized companies deal with possible negative effects from Britain's decision to leave the European Union.

In an effort to boost personal consumption, the government will launch a subsidy program to provide 15,000 yen each in cash to low-income earners.

The stimulus package also includes public expenditure totaling 13.5 trillion yen, including extending to Osaka a magnetically levitated train line planned earlier from Tokyo to Nagoya.

The government estimates the stimulus would push up real gross domestic product (GDP) by around 1.3 percent in the next two years.

(APD)