Japan approves additional $62-bn stimulus budget

The Japanese cabinet has approved an additional budget of ¥5.1 trillion ($62 billion) to stimulate the deflation-plagued economy, struggling to recover from the aftermath of the worst recession in six decades.

Prime minister Naoto Kan's emergency stimulus package aimed at fighting deflation and a surging yen will be submitted to Diet, the country's legislature for voting on Friday, The Japan Times reported.

"The measures are aimed at preventing another dip in the economy triggered by the decline of the economies in Europe and the United States," said chief cabinet secretary Yoshito Sengoku.

The proposed stimulus will be funded by ¥2.2 trillion in increased tax revenues this fiscal year and an equal amount of surplus carried over from the last year's budget. The government does not plan to issue any new bonds for the purpose.

An amount of ¥3.1 trillion is allocated for regional economies, small and medium businesses and building infrastructure, while ¥1.1 trillion is kept aside for welfare measures.

Approximately ¥87.2 billion is reserved to secure rare earth imports, severely affected by dispute with China, the world's rare earth monopoly.