Money Matters - Simplified

Japanese Cabinet approves stimulus plan

Tokyo -- Japan's Cabinet approved a $61.3 billion stimulus spending package Friday and Finance Minister Yoshihiko Noda pledged to support currency intervention.

Noda said "decisive action, including intervention, if necessary," would be used to keep the yen from gaining strength.

For the first time in six years, the Bank of Japan began selling yen in September to reduce its value. In spite of the intervention, the yen hit a 15-year high against the U.S. dollar Thursday at 82.11 yen. The yen's strength undermines the value of Japanese exports, a critical component of the country's economy.

The new stimulus measure, which is estimated to add up to 500,000 jobs to the Japanese economy, could face opposition in Japan's Parliament. The spending package was increased from $58.6 billion at the urging of the People's New Party, Xinhua reported.

Copyright 2010 United Press International, Inc. (UPI).

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