By Leika Kihara and Takaya Yamaguchi

TOKYO, Reuters – Japan should create an economic stimulus package of at least 32 to 33 trillion yen (282-$290 billion), to offset the effects of the coronavirus panademic. This was according to a senior official from the ruling party close to Prime Minister Fumio Kishhida.

According to Kozo Yamamoto (an architect of Shinzo Abe’s Abenomics stimulus policies), such large-scale spending will be required in Japan to close the output gap and meet the central bank’s 2% inflation target.

Yamamoto (now Kishida’s assistant on economic policy) stated, “The package could be funded by issuing Japanese Government Bonds (JGB).” The government needs to issue a large number of JGBs over the long term, so that they can be bought aggressively by central banks.

Yamamoto, who was formerly a finance minister official, has been heavily involved in creating Abenomics. This is a combination of huge monetary stimulus and fiscal stimulus that was created in order to lift Japan from economic stagnation.

Kishida stated that he would continue to support the Abenomics stimulus programs and will take further measures to spread the wealth to more households.

The first thing is strong economic growth through the three arrows that Abenomics offers. Yamamoto stated that redistribution is only possible after this. He also said that they exchange emails often with Kishida.

($1 = 113.5300 yen)