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The current central bank governor, Masaaki Shirakawa, is due to step down on March 19, and Abe is expected to appoint as his successor an expert who favors his more activist approach to monetary policy. Meanwhile on Thursday, the lower house of Japan's parliament approved a 13.1 trillion yen ($140 billion) supplementary budget for fiscal 2012, which ends in March, to support the stimulus program. Although the opposition-dominated upper house of parliament may reject the budget, the approval by the lower house, which is controlled by Abe's Liberal Democratic Party, will prevail. Japan's growth has stagnated since its "bubble economy" burst in the early 1990s, despite massive investments in public works that have pushed its national debt to the highest level among major industrial nations, at more than twice the size of the economy. Last year began on an upbeat note with annual growth in the first quarter at 6 percent, spurred by strong government spending on reconstruction from the March 2011 tsunami disaster. But the economy slipped back into contraction in the second quarter and deteriorated further as frictions with China over a territorial dispute hammered exports to one of Japan's largest overseas markets. For all of 2012, the economy grew 1.9 percent, after a 0.6 contraction in 2011. Despite the dismal data for last year, many in Japan expect at least a temporary bump to growth from higher government spending on public works and other programs. An index measuring consumer confidence, released earlier this week, jumped to its highest level since 2007, the biggest ever increase in a single month. Earlier this week, Abe appealed to businesses to raise wages to help boost domestic demand and carry on momentum from government spending. Data for the fourth quarter showed that private consumption, which accounts for more than two-thirds of Japan's economic activity, rose 0.4 percent in the fourth quarter while housing investment climbed 3.5 percent. Investment by businesses, however, fell 2.6 percent and exports dropped 3.7 percent.
[Associated
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