Japan considering new stimulus to revive recovery

Strong yen, plummeting growth prompts Japan's government to mull new stimulus measures

TOKYO (AP) -- Japan's economy may get another lifeline soon.

Faced with meager growth and a strong yen, the country's leaders are moving toward injecting more stimulus measures to fight a sharp slowdown in momentum. A new package would set Japan apart from the rest of the developed world, which is winding down stimulus steps even as worries grow about a cooling global economy.

Gross domestic product data earlier this week showed Japan grew at an annualized rate of just 0.4 percent in the April-June period, down from 4.4 percent the previous quarter. As a result, the country lost its place to China as the world's No. 2 economy.

But it will be a tricky task for Prime Minister Naoto Kan, who is also juggling a promise to reduce the country's massive debt and a possible challenge for leadership of the Democratic Party next month.

Kan has asked his Cabinet for ideas that limit new spending, suggesting tax and regulatory reforms as potential alternatives.

"Of course we have to consider fresh fiscal spending," Kan told reporters, according to Kyodo news agency. But "it seems possible to boost demand or stimulate the economy without depending on fiscal spending."

Separately, the country's finance minister indicated a cautious stance on taking on more debt, which is almost double the size of GDP.

http://finance.yahoo.com/news/Japan-considering-new-apf-1713666179.html?x=0&sec=topStories&pos=main&asset=&ccode=