Japan plans on implementing a 28 trillion yen stimulus package to aid its stagnating economy.
Prime Minister Shinzo Abe announced the package on Wednesday, valued at about $265 billion USD.
The package, meant to give the Japanese economy a boost, will consist of large increases in government spending, both at the local and national level, as well as loan programs. The details of this package are to be announced sometime next week.
According to Mitsubishi UFJ Morgan Stanley Securities’ senior economist Hiroshi Miyazaki, the amount planned is so large that it will be difficult to spend, and must be spread out over several years, and is likely to have a significant economic impact.
“The BOJ (Bank of Japan) is likely to ease policy, including increasing government debt purchases, so you could say the BOJ can absorb the new debt. It also makes it easier to show that the BOJ and the government are working together.”
Stimulus could trigger inflated yen, rising Bitcoin
The massive increase in government spending and loan programs can trigger an inflationary effect, causing the yen to lose value against Bitcoin.
Currently, the yen is showing a very strong surge, and this change in economic policy could have the effect of reigning in the price spike. This, combined with Bitcoin’s inevitable rise in the near future, might well further propel cryptocurrency value upwards.
Japan’s special history with Bitcoin
This year Japan became the #2 Bitcoin market in the world, overtaking the United States and running a close second to China. Earlier this year, the Japanese government officially recognized Bitcoin as a currency. Satoshi Nakamoto, Bitcoin’s enigmatic founder, while remaining unknown, chose a Japanese pseudonym.
On a darker note, Japan became infamous as the home of Mt. Gox, the large and popular Bitcoin exchange that famously went bankrupt after losing about 850,000 of customers’ Bitcoins, landing CEO Mark Karpeles in jail.