Japan plans new cash infusion for ailing economy

TOKYO -- Less than a week after approving an emergency budget to pay for job programs, the Japanese government said Wednesday that it was planning another burst of public spending to boost the ailing economy.

Signs that Japan's slump may be deepening after more than a decade have increased pressure on Prime Minister Junichiro Koizumi to dip into the nation's coffers yet again.

But news that Koizumi and his political allies have agreed to begin drafting plans to spend $32 billion added to mounting concerns that the popular leader is backsliding on a commitment to rein in runaway spending.

Koizumi tried to deflect that criticism Wednesday, saying that the spending would help his program of economic reforms rather than marking a retreat from them.

He spoke after leaders of his governing coalition decided they will submit the spending plans to Parliament during a session that begins in January. The extra money is meant to pay for economic stimulus measures in the current fiscal year, which runs through March.

Conservatives in Koizumi's Liberal Democratic Party have been clamoring for more construction projects and other public works.

as prospects for the world's second-largest economy have gotten gloomier.

Earlier this week Japan's central bank downgraded its assessment of the economy for a sixth straight month. Exporters have been hard hit by the worldwide downturn in the technology industry, while record unemployment at home has discouraged consumers from spending.