The Japanese government of Shinzo Abe announced a new round of economic stimulus on Wednesday 27 July that would inject up to ¥28 trillion (AUD$354 billion) into the economy. The government has also urged the Bank of Japan to take action in a coordinated action to boost the so-called ‘Abenomics’ stimulus package that has been waning of late. While the markets had been expecting a new round of stimulus, the size of the package was clearly at the upper end of expectations.
The planned package will go to a party meeting parliament on 2 August and be voted on during a parliamentary session in September according to a government report.
Japanese bonds rallied strongly on the news with 2 year bonds dropping to -0.37% and 5 year bonds falling to -0.38%.