Japan preparing $53 billion economic stimulus package this week: sources

Reuters
Japan's PM Abe smiles during the Lower House plenary session of the parliament in Tokyo
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Japan's Prime Minister Shinzo Abe smiles during the Lower House plenary session of the parliament in Tokyo November 26, 2013. REUTERS/Toru Hanai

TOKYO (Reuters) - Japan will craft an economic stimulus package this week worth about $53 billion to bolster the economy ahead of an increase in the national sales tax in April, people familiar with the process said on Tuesday.

The size of the package, ordered in October by Prime Minister Shinzo Abe, will be between 5.4 trillion yen ($52.43 billion)and 5.6 trillion yen, the sources told Reuters on condition of anonymity.

Government ministers have said the package needs to be at least 5 trillion yen to soften the economic blow of the tax hike - Japan's biggest step in decades toward curbing its enormous debt.

The government will craft an "effective" package amounting to "as much as possible above 5 trillion yen," Yasuhiro Hanashi, a parliamentary finance secretary, told a panel of Abe's Liberal Democratic Party.

The government is to decide on the measures on Thursday, but precise amounts will not be spelled out until the Cabinet approves a supplementary budget on Dec 12, the sources said.

Sources said last week that the budget, including the stimulus measures, would be worth some 7 trillion yen.

The BOJ's massive monetary easing and Abe's hefty government spending have had early success in lifting Japan from 15 years of deflation and tepid growth. ($1 = 102.9850 Japanese yen)

(This version of the story corrects package amount in second paragraph to 5.6 trillion yen from 5.5 trillion)

(Reporting by Yuko Yoshikawa and Takaya Yamaguchi; Writing by William Mallard; Editing by Shinichi Saoshiro)

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