Japan plots new green stimulus package

The Japanese government is reportedly preparing a major new economic stimulus package that will focus on driving investment in clean and energy efficient technologies.

According to reports in the Nikkei newspaper earlier today, the government has prepared a draft plan that would introduce new subsidies for factories developing green technologies, such as lithium ion batteries, LED lighting and other energy efficient and renewable energy products.

The plan, which is expected to be presented today by Economics Minister Satoshi Arai to recently-elected Prime Minister Naoto Kan, also proposes extending current subsidies supporting energy efficient consumer electronics and continuing with a home loan programme that promises fixed rate loans for energy efficient homes.

The stimulus package could be approved as early as next month as the government seeks to protect Japan's increasingly fragile recovery.

Recent data has suggested that the country's export-led recovery is slowing as the Yen continues to strengthen and the government is keen to intervene in order to avoid the threat of stagnation.

The bulk of the stimulus package is expected to focus on low carbon industries. However, it will also feature new services to help young people find jobs and increased support for small firms.