Japan outlines quake-tax increase

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28 September 2011 Last updated at 03:54 GMT Japan's rebuilding effort will take years to complete Japan's government and the ruling Democratic Party (DPJ) have agreed to temporarily raise taxes to pay for reconstruction after the deadly March earthquake.

The plan to raise 9.2tn yen ($120bn; ￡77bn) needs approval by the DPJ's coalition partner and the opposition party.

Officials said a further 2tn yen would be raised by selling government assets.

The earthquake and subsequent tsunami killed more than 16,000 people.

At the same time, thousands of homes and businesses were destroyed in the country's north-eastern coastal areas.

The new tax plan will increase taxes on incomes, companies, property and tobacco.

Corporate taxes will be raised starting next April and last three years, and income taxes will go up as of January 2012 for 10 years.

The tax on tobacco will be increased as of October 2012.

The Democratic Party of Japan also agreed to a third post-quake stimulus package of 12tn yen, government officials confirmed.

That plan must also now be negotiated and approved by opposition lawmakers.

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Japan tourism industry recovering

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6 October 2011 Last updated at 11:20 GMT Himeji Castle is one of 14 World Heritage sites in Japan Japan's tourism industry is showing signs of recovery following the devastating tsunami and earthquake last March, according to a report.

The World Travel & Tourism Council said that foreign visitor numbers in June and July were 36% lower than for the same period last year.

In comparison, visitor numbers fell 62% in April and 50% in May year-on-year.

"So, while a full recovery is still some way off, the situation has improved significantly," the WTTC said.

The council's president and chief executive David Scowsill said in the report: "As the world's third largest travel and tourism economy, the recovery of Japan is one of the most compelling issues facing the industry anywhere in the world."

Prior to the earthquake and tsunami on 11 March, Japan's travel and tourism industry was expected to provide nearly 1.5 million jobs in 2011 and to directly contribute 2.2% of total Japan's gross domestic product.

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Japan extends quake loan scheme

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7 October 2011 Last updated at 05:26 GMT The earthquake and tsunami caused widespread damage to Japan's infrastructure The Bank of Japan (BOJ) has extended its loan scheme for banks operating in areas affected by the earthquake and tsunami by six months.

The central bank had offered 1tn yen ($13bn, ￡9bn) in special loans to banks to ensure liquidity for reconstruction efforts after the natural disasters.

The loan scheme was due to expire at the end of this month.

BOJ also left its interest rate unchanged at 0.1% in a bid to boost growth amid uncertain economic outlook.

"Rebuilding from the earthquake is the dominant story for Japan, and this will become an identifiable force in the second quarter of next year." said Adrian Foster of Rabobank International.

Uncertain outlook Continue reading the main story

If concerns over Europe trigger a spike in the yen that would threaten Japan's real economy, the BOJ could ease policy again as it did in August”

End Quote Yasuo Yamamoto Mizuho Research Institute Japan's economy in a recession and has contracted for three successive quarters.

Though the reconstruction and rebuilding efforts are expected to boost growth, analysts warned that external factors may hurt Japan's economy.

"Uncertainty over Europe remains and there is a possibility that more negative news will come out of the region." said Yuichi Kodama of Meiji Yasuda Life Insurance.

The are fears that a global economic slowdown may dent demand for Japanese exports and impact growth.

Analysts said the central bank may be forced to ease its policies even further if that happened.

"I think there is still a 50% chance of additional easing by the BOJ this year." Mr Kodama added.

Yen trouble

The uncertainty surrounding the global economic growth has seen investors flock to the yen, a traditional safe haven in such times.

That has resulted in the Japanese currency strengthening against the US dollar, a move that has hurt the country's manufacturing and export sector.

Japanese authorities have already intervened in the currency market in a bid to stem the yen's rise and analysts said the central bank may be forced to step in if the currency continued to rise.

"If concerns over Europe trigger a spike in the yen that would threaten Japan's real economy, the BOJ could ease policy again as it did in August," said Yasuo Yamamoto of Mizuho Research Institute.

"Further easing would involve boosting its asset-buying scheme."

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VIDEO: Japan businesses more optimistic

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3 October 2011 Last updated at 01:21 GMT Help

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