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Japan OKs USD 32.9 billion extra budget for quake reconstruction

TOKYO, Feb 8 (KUNA) -- Japan's parliament on Wednesday approved a JPY 2.53 trillion (USD 32.9 billion) extra budget to fund reconstruction work following last year's March 11th earthquake and Tsunami.
The forth supplementary budget for the current fiscal year through March 31st won majority approval at parliament's Upper House following the approval by the more powerful Lower House earlier this month.
The budget includes JPY 740 billion (USD 9.6 billion) to support small companies, such as parts suppliers, which have been affected by the March disasters and the recent stronger yen. The budget also earmarks JPY 500 billion (USD 6.5 billion) in credit guarantees by the government to support companies suffering from dual-loan problems in the disaster-hit northeastern region. JPY 300 billion (USD 3.9 billion) goes to finance environmentally friendly vehicle promotion programs in support of automakers hit by the yen's appreciation.
The yen's strength hurts Japan's export-led recovery from the March 11 disasters, as it worsens export profitability and affects earnings for exporters by making Japanese products more expensive overseas. It would also lead to the hollowing out of the Japanese industry, given that domestic manufacturers may increasingly shift their production overseas in pursuit of cheaper costs.
Prime Minister Yoshihiko Noda's Cabinet has already implemented three extra budgets for the fiscal year 2011 worth more than JPY 18 trillion (USD 233.8 billion) in total to finance reconstruction work following the March disasters. It is the first time since fiscal 1947 that Japan has introduced a fourth extra budget. The government will not issue special government bonds to fund the budget. (end) mk.gta KUNA 081253 Feb 12NNNN