Japan's lower house approves 3rd extra budget

Japan's lower house of parliament on Thursday passed a 12.1 trillion yen (155 billion U.S. dollars) third extra budget to finance post-quake reconstruction initiatives, with funds also allocated to deal with the impact of a persistently strong yen on the nation's economy. The ruling Democratic Party of Japan (DPJ) managed to gain the majority support of the main opposition Liberal Democratic Party (LDP) as well as the New Komeito party, with all three parties agreeing that the draft budget should be ratified by the month's end. The DPJ had to compromise on a number of key issues however to cajole the support of opposition parties, who control the upper house of parliament in Japan's bicameral system, including agreeing to extend the maturity of government bonds for reconstruction to 25 years from 10 years. Another issue of contention between the parties has been the DPJ's notion of a tobacco tax hike, which the LDP is staunchly opposed to and policy chiefs said earlier Thursday that the idea of raising tobacco taxes may be shelved for the time being. Bills related to the supplementary budget have yet to be approved by the DPJ's opponents, although they are expected to also clear the lower house early next week, the policy chiefs added. Prime Minister Yoshihiko Noda, also the DPJ's president, floated the idea recently of drafting a fourth extra budget for this fiscal year, but Chief Cabinet Secretary Osamu Fujimura, the government's top spokesperson, told a press conference earlier Thursday that the notion had yet to be confirmed and was still up in the air. The third extra budget is the second biggest extra budget on record in Japan and besides financing reconstruction efforts on the quake-ravaged eastern seaboard of the country, 2 trillion yen (26 billion U.S. dollars) have also been allocated to cool the yen's recent rise, which has negatively impacted Japan's key export sector that relies on a weaker yen to boost profits when they are repatriated from overseas.