Mure Dickie, Lindsay Whipp and Robin Harding
Saturday, Dec 13, 2008
Japan unveiled a package of “emergency measures” for its recession-mired economy on Friday, pledging Y4,000bn ($43.8bn) in spending and tax cuts and Y3,000bn in promised credit for companies as well as raising its limit for public fund injections for financial institutions to Y12,000bn.
The move came as the yen went briefly through the much-watched level of Y90 to the dollar to hit a 13-year-high against the US currency, fuelling concern about the prospects for exporters, the traditional engine of Japanese growth.
The benchmark Nikkei 225 shares average ended the day down 5.6 per cent.
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“The market was shocked, and I was shocked to see the dollar fall below Y90 today,” Shoichi Nakagawa, finance minister, told a press conference amid strong speculation that Tokyo would move to hold down the yen.
However, asked if Tokyo might intervene in the currency markets, Mr Nakagawa said: “[Intervention] isn’t in my mind at all.”
Unveiling the government’s package of economic measures, Taro Aso, prime minister, said: “The economy is deteriorating in a manner that goes beyond our anticipation.”
His planned measures include Y1,000bn in tax cuts for recipients such as home owners and businesses making capital investments, and another Y1,000bn in grants to local governments for use mainly in job creation.
This article was posted: Saturday, December 13, 2008 at 4:19 am