Japan announced a fresh $708 billion economic stimulus package on Tuesday to speed up the recovery from the country’s deep coronavirus-driven slump, while targeting investment in new growth areas such as green and digital innovation.

The new package will include about 40 trillion yen ($384.54 billion) in direct fiscal spending and initiatives targeted at reducing carbon emissions and boosting adoption of digital technology, Prime Minister Yoshihide Suga said in a meeting with ruling party executives.

Policymakers globally have unleashed a wall of monetary and fiscal stimulus to prevent a deep and prolonged recession as the coronavirus closed international borders and sent millions out of work. In the United States, a $908 billion coronavirus aid plan is currently under debate in Congress.

“We have compiled the new measures to maintain employment, sustain business and restore the economy and open a way to achieve new growth in green and digital areas, so as to protect people’s lives and livelihoods,” Suga said at the meeting. Suga’s cabinet is set to endorse the stimulus package later on Tuesday, which would bring the combined value of coronavirus-related stimulus to about $3 trillion.

Two previous packages this year worth a combined $2.2 trillion focused on dealing with the immediate strain on households and business from the pandemic.

The new plan includes a 2-trillion yen fund to promote carbon neutrality by 2050, 1 trillion yen to accelerate digital transformation and 1.5 trillion yen in subsidies to support restaurants hurt by shortened trading hours due to COVID-19.

Japan’s economy, the world’s third-largest, rebounded in July-September from its worst postwar contraction in the second quarter, though many analysts expect a third wave of COVID-19 infections to keep any recovery modest.

But the Japan’s benchmark 10-year government bond yield likely to remain negative for the foreseeable future, the pressure to keep buying debt abroad will continue, even as rates fall elsewhere.

USD/JPY 4 Hour Chart:

Support: 103.88 (S1), 103.70 (S2), 103.49 (S3).

Resistance: 104.27 (R1), 104.49 (R2), 104.66 (R3).

The announcement of the stimulus package to recover from the covid 19 disasters favors yen against the greenback. We expect a bearish trend for USD/JPY.