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The
government is working on a new spending package that may include
cash payouts to households and subsidies to tourism companies
hit by a slump in overseas visitors, according to government
officials with direct knowledge of the matter.
The size of the package, to be compiled in April, may range from
10 trillion to 20 trillion yen ($96 billion to $193 billion),
funded by government bonds, they said.
"There may be little choice but to issue deficit-covering
bonds," to finance the package, one official said on condition
of anonymity because of the sensitivity of the matter.
The meeting between Kuroda and Abe - held every few months to
exchange views on the economy and markets - came before the BOJ
meets next week, when the central bank is expected to ramp up
monetary stimulus. They last met in September.
The BOJ would join the Federal Reserve, the Bank of England and,
most likely, the European Central Bank. The Fed and the BoE both
have cut their benchmark interest rates half a percentage point,
and the ECB is all but certain to roll out new stimulus measures
when it meets later on Thursday.
Policymakers are working to bolster growth as the coronavirus
epidemic attacks their economies, already weakened by trade
tensions and slowing global demand.
Kuroda said the BOJ has been providing ample liquidity and
stepping up asset purchases in response to recent market moves,
which he said were "fluctuating wildly."
"We'll take appropriate steps as necessary in a timely manner,
while closely monitoring developments," Kuroda told reporters.
The BOJ has been under pressure to loosen policy at its March
18-19 rate review as slumping stock markets, a spike in the yen
and the fallout from the coronavirus epidemic threaten to push
the economy into recession.
A survey released on Thursday showed large Japanese
manufacturers' business sentiment fell to a near nine-year low
in January-March.
The government is expected to cut its assessment of the economy
in a monthly report due later this month, sources have told
Reuters, highlighting the widening economic damage from the
coronavirus.
(Additional reporting by Daniel Leussink and Izumi Nakagawa;
writing by Leika Kihara; editing by Larry King)
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