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Economy

Japan stimulus would try to boost infrastructure exports

TOKYO -- The Japanese government is considering an economic stimulus package worth over 10 trillion yen ($94.1 billion) to, among other things, expand infrastructure exports, The Nikkei lerned on Friday.

The package is expected to be finalized by the end of the month.

The government plans to strengthen the financial base of state agencies that undertake infrastructure export projects, such as the Japan International Cooperation Agency and the Nippon Export and Investment Insurance.

The stimulus is seen as a way to consolidate these and other agencies' capital bases so as to allow them to lend large amounts in a short period of time.

At the latest Group of Seven summit in May, Prime Minister Shinzo Abe expressed his intention to use up to $200 billion over the next five years to support infrastructure projects around the world.

Japan is keen to spearhead the building of power stations, high-speed railway networks and ports, all overseas. The not-so-ulterior motive is to boost Japanese corporate earnings. The government hopes to prop up Japan's economy through these as well as domestic projects.

The stimulus package will also include a measure to extend a law designed to strengthen regional banks' financial standing by preemptively injecting state money to protect the banks from any Brexit fallout. The law, set to expire this coming March, will likely be extended for a few years.

The government also plans to increase spending to help the recovery and reconstruction of Kumamoto Prefecture, in Japan's south, which in April was struck by a string of huge earthquakes. In addition, it wants to pour more money into the rebuilding of northeastern Japan, still recovering from the 2011 earthquake and tsunami.

The draft also includes measures to improve working conditions, such as a cap on overtime work and an expansion of childcare leave, together with a plan to lower contributions to the unemployment insurance fund so as to stimulate consumption.

(Nikkei)

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