Japan approves $10.7-bn stimulus to revive growth

The Japanese government on Friday approved a fresh stimulus package to breathe life into the sagging economy, which is struggling to avoid a recession amid slowing global growth and an island row with neighbour China, the world's second-largest economy.

The cabinet gave its green signal for the 880-billion yen ($10.7-billion) financial aid in an effort to boost economic growth ahead of the forthcoming general election on 16 December.

The present aid package is more than double the previous one in October, when the Japanese government injected around $5.1 billion to stimulate the world's third-largest economy.

Opinion polls suggest a victory for the main opposition leader Shinzo Abe, who is leading the Liberal Democratic Party, defeating Prime Minister Yoshihiko Noda and his Democratic Party of Japan.

Abe has vowed to take aggressive measures to spur economic growth, including increased spending on public works and pressure on Bank of Japan to ease monitory policy to boost growth, if his party wins the election.

Nevertheless, latest economic data released on Friday provided some relief as factory output unexpectedly rose 1.8 per cent in October over the previous month, beating analysts' expectations of a 2.2 per cent fall. (See: Japan's industrial output up 1.8 per cent in October)