The cabinet of Japanese Prime Minister Shinzo Abe approved a fresh stimulus package worth $29 billion Saturday in a bid to boost the economy, hit hard by a tax hike.
The 3.5-trillion-yen package is designed to help the provincial economy, small businesses and the household sector, as well as to increase public spending to rebuild areas hit by natural disasters.
"With speedy implementation of these measures, I think we can bolster consumption and lift the provincial economy and expand the positive growth cycle to all corners of the country," Abe told a meeting with ruling lawmakers shortly before the cabinet officially approved the package.
The world's third largest economy is seeing a barrage of weak economic indicators after an April consumption tax rise slammed the brakes on growth.
Since coming to power two years ago, Abe has offered a series of pro-business, big-spending policies in a bid to bring Japan out of deflation.
His programmes were supported by the Bank of Japan's aggressive monetary easing.
The efforts have driven down the yen and boosted earnings of major firms, particularly exporters.
But critics have argued that the benefits were not felt by small businesses and consumers while real wages shrank.
Of the 3.5 trillion yen in the fresh stimulus, 600 billion yen will go to programmes to boost the local economy, 1.2 trillion yen for steps to help consumers and small businesses, and 1.7 trillion yen to rebuild areas hit by natural disasters, such as the 2011 tsunami and massive landslides this year.
The stimulus includes subsidies for small businesses that are facing soaring fuel costs as a result of the falling yen.