Japan spends lots of yen

Japan announced a stimulus package of 10 trillion yen, or $100 billion. This package will double the amount of money the government of Japan will spend to curb it's own recession.

The concern here, is that Japan's national debt was about 120 percent of its GDP before the recession, and is currently 175 percent of its GDP. By far the worst debt/GDP ratio of the world powers. Economists are questioning whether Japan has the ability to implement such a large stimulus package. The news became an immediate double-edged sword. The Asian stock markets reached a six-month high after the news was released, but the yen reached a six-month low against the dollar.

"Japan's debt is already so high that a few additional percentage points would make little difference. At these levels, whether gross debt is 175% or 180% is surely neither here nor there. Japan has had little difficulty financing large budget deficits for many years. Near-zero official interest rates, persistent deflation and sluggish economic activity have kept Japanese government bond yields low even without additional support to the market from quantitative easing."