Japan’s daily, the Nikkei reported over the weekend that the Japanese PM Shinzo plans to announce a package of new spending measures on Tuesday to boost the economy.
According to the local newspaper, Abe will probably unveil details of the measures at a press conference the same day that Japan’s 96.7 trillion yen ($US855 billion) budget for fiscal 2016 is expected to become law.
Japan’s consumer inflation remained flat in the year to February as low energy costs and weak consumption restrained price growth, keeping the Bank of Japan under pressure to introduce additional stimulus even after easing policy less than two months ago.
What could be the outcome of this move?
This is in fact known as an expansionary economic policy, the kind of policy that is aimed at reviving and boosting the economy. This means JPY could depreciate against other currencies.
We also have to note that USD/JPY currently shows a clear bullish trend. The trend is therefore expected to continue upwards further, especially in the face of the strength of the USD.
