The Japanese government has approved a fresh 10.3 trillion yen ($116bn; £72bn) stimulus package to shore up its flagging economy.
Prime Minister Shinzo Abe announced the decision at a news conference where he said the new measures will add 2% to Japan's real economic growth.
The country is currently in recession after global consumer demand softened, leading to an impact on exports, while domestic consumption fell. The package will include infrastructure spending, as well as incentives for businesses to boost investment.
Measures to rebuild areas devastated by the earthquake and tsunami of 2011 are also included in the new package.
"Unfortunately, the previous administration failed to work out how to boost growth and expand the economic pie," Abe said, according to the BBC.
"It is vital that we have an economic strategy that can create jobs and raise incomes to sustain growth."
Abe returned to office in December, having previously served as Prime Minister in 2006 and 2007. He has pledged to take an aggressive stance in order to stablise the economy and boost growth.
He has also said he will allow the yen to weaken to provide support to exporters. The government will use Japan’s foreign exchange reserves to buy bonds issued by the European Stability Mechanism on a regular basis and to support the funding of overseas mergers and acquisitions by Japanese companies.
After the announcement, the yen weakened as far as Y89.35 to the dollar, reaching its lowest point against the US currency since June 2010, the FT reports.
Abe has also urged Japan's central bank to do whatever it takes to meet an inflation target of 2% to counter a persisting cycle of sinking prices and weak demand.
The market reacted positively to the news, with Japan’s Nikkei 225 up 1.4% at 10,801.
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