Japan's lower house approves 60 billion dollar stimulus

TOKYO, Nov 16, 2010 (AFP) - Japan's lower house of parliament passed a supplementary budget Tuesday including a new stimulus package worth 62 billion dollars to push forward economic recovery.

The 5.1-trillion-yen fresh stimulus features job programmes, welfare spending and schemes for small businesses and infrastructure, aiming to avoid a double-dip recession as Japan struggles with a high yen and deflation.

The budget will go to the upper house for a separate vote, but is in effect approved since the powerful lower house, under the ruling party's control, can overrule the upper house on budget bills.

The budget also included an 87-billion-yen provision to find new supplies of strategic materials including rare earth minerals that are used in high-tech components for cars and computers.

China, which supplies nearly the entire global rare earth demand, in September started to cut its exports, particularly to Japan, as the two Asian giants engaged in a tense territorial dispute.

The new stimulus is the second under centre-left Prime Minister Naoto Kan, who came to power in June.

The government in September approved a 915-billion-yen package designed to create around 200,000 jobs and to lift the country's gross domestic product by about 0.3 percent.

The economy grew at an annualised pace of 3.9 percent in the July-September period, compared with the previous quarter's revised 1.8 percent growth, according to data Monday that beat market expectations of 2.5 percent.

Japan's fourth straight quarter of expansion was driven by a consumer rush to make the most of government subsidies for car buyers before they expired in September and a surge in cigarette sales before a new tobacco tax was levied.

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