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.The party is touting public works spending and subsidies to strategically important sectors as part of its plan to pull the economy out of recession.
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