Recognizing the need to take immediate action to stimulate its troubled economy, the Japanese government announced a third supplemental budget package of more than $167 billion including tax cuts on November 16, 1998. This program includes more than $83 billion in real spending allocations and measures to create one million new jobs. It will build on previously announced stimulus measures -- totaling more than $500 billion -- and a range of additional policy initiatives, to help restore positive growth and domestic demand in Japan. This program will help Japan raise demand by 2-3% in order to achieve a positive growth rate of 1% or more in FY1999 and to engineer a recovery by FY2000. By FY2001 demand is expected to shift from public to private sector-led growth as the measures envisioned in the "Action Plan for Economic Structural Reform" take effect. The Japanese government has taken these actions to counter the current recession, which is the worst in Japan's post war history.

Emergency Measures to Stabilize the Financial System and Alleviate the Credit Crunch

• Restoring the credibility of Japanese financial institutions by injecting public money into the financial system.
• Alleviating the credit crunch through legislation enabling an increased supply of credit from the Japan Development Bank and other government agencies.

Recovery Measures that Contribute to Building a 21st Century Society

• Promotion of residential housing and the multiplier effect of this activity by facilitating mortgage financings through the Housing Loan Corporation.
• Maximizing job creation and technology development, promoting private sector investment and the creation of one million new jobs.
• Expansion of the physical and social infrastructure that Japan will need to remain an effective competitor in the 21st century.
• Providing immediate stimulus to consumer demand through regional promotion coupons that will be delivered to qualifying families.

Reducing Risks to the Global Economy

Relieving the Asian Financial Crisis: In addition to the Miyazawa initiative which offers $30 billion in additional loans and credit guarantees, additional measures will be adopted including increased Japanese EXIM and OECF funding.

A complete copy of JETRO's FOCUS: ECONOMIC RECOVERY NEWSLETTER can be viewed at its internet web site: http://www.jetro.org/newyork/newsnet/focus/focus1.html

Focus is published and disseminated by JETRO New York, 1221 Avenue of the Americas, New York, NY 10020 in coordination with KWR International, Inc., 140 West End Avenue, New York, NY 10023, Tel: 212-799-4294, Fax: 212-799-0517, E-mail:kwrintl@kwrintl.com. JETRO New York is registered as an agent of the Japan External Trade Organization, Tokyo, Japan and KWR International, Inc. is registered on behalf of JETRO New York. This material is filed with the Department of Justice where the required registration statement is available for public viewing.

CONTACT: JETRO NY
Hidehiko Nishiyama
Executive Director
Tel: 212-997-0416, Fax: 212-997-0464
E-mail: nishiyamah@newyork.jetro.org