But the financial markets were unimpressed by the budget measures, the ninth fiscal stimulus for the ailingeconomy since the start of the Nineties. The Nikkei 225 index fell 1.3 per cent to close at 18,327.28, reversing most of the previous day's gains. The bond market also reacted adversely to news of another increase in the national debt, now equivalent to 118 per cent of GDP. The headline total of Y18,000bn includes just Y6,500bn in extra direct government spending in the next year, which economists said would not be enough to provide the economy with an extra stimulus. The rest of the package was loan guarantees and multi-year commitments.
The government highlighted measures targeted at small firms, including a top-up for the government loan guarantee programme for small firms, incentives for business "angels", additional investment in venture capital by the Ministry of International Trade and Industry and more generous rules for stock option schemes. In the past, Japan has had little genuine venture capital, officials admitted.
MITI said it aimed to boost the number of business start-ups from 140,000 a year to 240,000 a year and to create one million new jobs over five years.
The Tokyo Stock Exchange yesterday simultaneously launched a new market with easier listing requirements to reduce the typical 20-year process of taking a company public.
However analysts were sceptical that the government package would stimulate new enterprise. Most thought the trade ministry would remain too prone to intervention.