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. Last Updated: 07/27/2016

Japan Unveils $20Bln in Spending

TOKYO -- Japan's government said Wednesday it will spend a fresh 2.5 trillion yen ($20.39 billion) to buoy the ailing economy by tapping a special fund to avoid breaking its pledge to limit fresh bond issuance.

The latest spending package, which comes only a week after the last one was enacted, will be drawn from proceeds from past sales of shares in the former state telephone monopoly, a move likely to draw fire from critics who had called for a stricter fiscal stance.

"Someone said it was like money stashed away in a piggy bank. It's a convenient piggy bank," said Prime Minister Junichiro Koizumi, ending weeks of speculation over whether his administration would decide to compile a second extra budget.

"We made the decision on the basis that we need policy steps to promote structural reform," Koizumi told reporters.

The innovative sourcing for the budget enables Koizumi to give the economy a shot in the arm and buy more time for his planned structural reforms while sticking to his pledge to keep annual fresh debt issuance within 30 trillion yen.

Japan's Economics Minister Heizo Takenaka reportedly told leaders of the three-way ruling coalition that the Finance Ministry will utilize funds that had been left in a bond sinking fund from previous sales of shares in Nippon Telegraph and Telephone Corp. to finance the spending package.

Japan's upper house enacted a first, 3 trillion yen supplementary budget only last Friday.

The latest spending will be part of a 4 trillion yen overall package that Koizumi said would be used to promote his reforms.

Earlier, Finance Minister Masajuro Shiokawa said the 30 trillion yen debt cap was "a big issue."

"It is true that there are disagreements over this issue with other ministers. ... But in the end, we will stick to the 30 trillion yen limit.

"It is part of pursuing structural reform and economic recovery at the same time," he added.

The second extra budget will be deliberated at the start of the next ordinary parliamentary session in January.

Economists said the amount of fresh spending was within expectations.