TOKYO - Prime Minister Taro Aso on Thursday unveiled Japan's second economic package in about two months that includes spending worth 5 trillion yen (S$74.7 billion) as the global credit crisis pushes the world's No.2 economy into a recession.
The latest steps came on top of an 11.7 trillion yen economic package compiled in late August which was aimed at helping ease the pain from high oil prices, including cutting highway tolls and boosting loan guarantees for small firms.
Mr Aso's announcement of Japan's second economic package in two months coincides with growing expectations that the central bank will cut its already rock-bottom interest rates for the first time in seven years when its policy board meets on Friday.
'I will implement bold policies so people who are confronting pain will feel the real effect,' Mr Aso, 68, wrote in his weekly email magazine published on Thursday. 'Drawing on all possible wisdom, we must overcome this 'once in 100 years' crisis.'
Economists were sceptical, however, about whether the package - seen totalling about 5 trillion yen in new spending - would do much to rescue an economy slipping into recession as a strong yen batters exports and sliding share prices weaken banks.
The Nikkei share average hit a 26-year low earlier this week.
'If the government wants to shore up the economy, it should have focused on easing the pain of exporters, which were the primary victims of the current financial crisis and a global slowdown,' said Mr Akio Yoshino, chief economist at Societe Generale Asset Management.
The package is expected to include 2 trillion yen in tax rebates and handouts, tax breaks on mortgages, a bank rescue scheme to allow public fund injections and relief for small firms suffering from a credit crunch.
Mr Aso also plans to outline a midterm plan to address Japan's huge public debt and anxiety about funding the growing social welfare costs of a fast-ageing society.
Some voters were unimpressed. 'This is...