What's going on?

Japan�s economy got a Godzilla-sized goody bag on Thursday as the country�s government announced $121 billion in additional spending � but things are getting a little too hot in India.

What does this mean?

The Japanese economy has been growing at a minuscule rate in recent years � but with slumping exports exacerbated by a sales tax hike and damage from Typhoon Hagibis, it�s expected to shrink 2.7% this quarter. To avert a recession, the government has decided to turn on the taps and increase spending on infrastructure and technology � a return to the �Abenomics� of the early 2010s.


Japanese leaders hope the �stimulus package� will add 1.4 percentage points to economic growth. But investors aren�t so sure: one analyst expects a boost of just 0.2 percentage points in the coming year.

Why should I care?

For markets: Pass the parcel.

These �fiscal� economy-boosting measures are distinguished from �monetary� policy, where central banks cut interest rates to encourage consumers and businesses to spend. With Japanese rates already at -0.1%, the central bank has run out of options � so it�s up to the government to get things back on track instead. Japan�s not the only place this is happening: over in Europe, the central bank is encouraging governments to break out their checkbooks too. All this extra cash could be a windfall for companies working on the new infrastructure projects�

Zooming out: Crying over onions.

India�s central bank also asked the government to help out on Thursday � but for a different reason. It dashed expectations of a cut to its target interest rate due to worries about food-driven inflation: in November, onion prices alone were an estimated 150% higher than the same time last year (tweet this). Resulting protests made the authorities wary of pushing up prices further through cheaper borrowing. It�s a problem other countries may soon face: on Thursday, the United Nations reported that average world food prices hit their highest point in over two years.