Japan unveils $4 billion package to address the impact of the coronavirus

Japan unveiled on Tuesday a second package of measures worth some $4 billion in spending to deal with the impact of the coronavirus outbreak, focusing on support for small and medium-sized enterprises, while concerns about risks to its fragile economy are growing.

The package, which amounts to 430.8 billion yen (about US$4.1 billion) in spending, shows the pressure the authorities are under to boost fragile growth and reduce the risk of bankruptcies, while event cancellations and the collapse of tourism threaten to affect the economy.

To help finance the package, the government will draw on the rest of its fiscal year budget reserve of about 270 billion yen, Japanese Prime Minister Shinzo Abe said.

The measure is likely to affect the Bank of Japan's decision in its March 18-19 policy review.

The bank will seek to ensure that firms affected by the virus outbreak do not suffer a financial drought before the end of the current fiscal year in March, Reuters reported.

Finance Minister Taro Aso said on Tuesday that there is no need for a larger extraordinary budget, adding that the effects of the outbreak have not yet reached the scale of the 2009 financial crisis.

"We must confirm the current situation," Aso told reporters after a cabinet meeting, adding that "there is nothing to say" about whether the government needs an additional budget.