The Japanese cabinet has approved fresh stimulus spending of more than Y20 trillion ($A215 billion), rushing to fulfil campaign pledges to break the world's third-biggest economy out of its deflationary slump.

Prime Minister Shinzo Abe announced the decision at a news conference where he said the money was intended to add 2 per cent to economic growth and contribute 600,000 new jobs.

Abe urged the central bank to move more aggressively to encourage lending and meet a clear inflation target.

Abe took office last month after a parliamentary election victory by the Liberal Democratic Party.