JAPAN has injected USD 5.3 billion cash to boost the stumbling economy, a move which is expected to add pressure for more central bank measures with a general election looming on the horizon.

In a package that assigned cash for the coastguard along with an island dispute with China, the cabinet agreed the 422.6 billion yen in emergency spending, with money to be coming mainly from reserve funds rather than new debt which will lead to an exit from deflation and jumpstart the economy. The relatively small aid package is expected to add pressure on the Bank of Japan to extend its 80 trillion yen asset purchase scheme after a policy meeting next week as Japan's post-disaster economic resurgence slows.

It also drew attention to mounting stress on Japan's national budget after government said it would suspend 5.0 trillion yen in spending due to a political row that has left the government facing a cash crunch which could see it run out of money within months.

Under the package announced yesterday, more than 260 billion yen will be for regions hit hard by last year's quake-tsunami disaster and nuclear crisis. About 17 billion yen will be used to beef up Japan's coastguard at a time of heightened tensions over the ownership of an East China Sea island chain believed to sit atop natural resources.