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Japanese Prime Minister Naoto Kan is closely watching the economy's performance, to see if fresh stimulus is needed. The announcement came as worries mount that the world's number two economy is losing steam.
Kan says the government may finance fresh stimulus steps with budget reserves for the current fiscal year to next March. Economists estimate Japan's economy slowed considerably in the second quarter, after expanding an annualized five percent in the first quarter. This was because export growth moderated, and a boost to consumer spending from government incentives faded.
The outlook for the export-driven economy is clouded by the latest rise in the yen towards a 15 year high against the faltering US dollar.
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