Japan’s government announced that it will commit 7.2 trillion yen (US$81 billion) to direct stimulus spending as fears grow that Japan’s economy could return to deflation. An appreciating yen and continued weak demand for Japan’s exports in its largest markets in the US and Europe are expected to continue to batter Japan’s exports well into 2010.
Bank of Japan
“We must present an economic package promptly in order to make the economic recovery solid in the face of the current severe economic and employment situation, the yen’s rise and deflation,” the government said.
