What's going on?

Japan announced $1.1 trillion of extra spending on Wednesday, in an effort to get rid the economy of the lingering effects of the pesky coronavirus.

What does this mean?

The world�s third-largest economy doubled down on last month�s spending measures with another, similarly-sized support package that brought the total to $2.2 trillion � equivalent to 40% of the country�s annual economic output. The package ranks among the world�s biggest used to deal with the pandemic, and includes support for struggling businesses, rental payments, and healthcare services.

The government also set aside almost $100 billion of emergency cash in case the country�s hit by a second wave of infections. But some experts argue it mightn�t be needed at all: as one of the few countries that didn�t impose a national lockdown in the first place, Japan has fewer restrictions to ease � the process that’s often behind a second spike in cases.

Why should I care?

For markets: Size matters.
At more than twice the size of its economy, the Japanese government�s debt load is already one of the biggest in the world (tweet this). But all this new spending has to come from somewhere, so it�s no coincidence Japan announced it�s adding to that debt by bringing this year�s total bond issuance to $2 trillion. That, in turn, is putting extra pressure on the country�s central bank, which has been trying to keep the government�s borrowing costs low by buying up bonds to increase their price and lower their yields.

Zooming out: Let�s make this official.
Japan�s massive spending package wasn�t the only one to hit the news on Wednesday: the European Union made last week�s proposed $550 billion aid package official, while also upping its support to $800 billion � with the additional cashola coming in the form of loans to the regions and sectors worst affected by coronavirus.