Japanese Economy at a major Change

The Bank of Japan has had to make some difficult decisions in their new economic condition but Finance Minister, Yoshihiko Noda, supports and defends all of the bank’s choices. Even though the new policies may be criticized for not being as effective as they should be, Noda is standing behind them completely.

The new stimulus package is worth 920 billion yen, 11 billion US dollars, and will be financed by reserve funds. The government’s plan is to end deflation and contain the value of the yen as quickly as April 2011.

The latest policy step includes consumption boosting, creating more jobs, and extending low interest rates to banks. To create more jobs, Japan wants to hire more high school and college graduates and create more internships for them as well. To help make their country more economically friendly and to boost consumption, they are planning to give government incentives for products that are energy efficient and good for the economy.

Japan’s economy is weak right now with the yen going to a fifteen year high against the dollar making their exports decline drastically. Since Japan is largely an export based country, this is a recipe for disaster. The government is hoping the stimulus plan will help recover the economy as swiftly as possible. They realize that this same thing is happening globally and that it is hard on all governments, not just theirs.

One of the major problems facing the Japanese government is that many of their agencies are requesting budgets that are higher than the government had originally planned on. The fiscal year 2011 budget has now reached 96 yen even after a requested budget cut. Japan’s weak economy cannot handle this at this time and it is the government’s main goal to get their country out of debt quickly. There are meetings in place the next few weeks to further discuss the economic future of Japan.