Japan has announced its first major policy initiative to end deflation and drive a recovery from a recession since Shinzo Abe became the Prime Minister of the country on 26 December 2012.

The Abe-led Japanese government has announced plans to spend 10.3 trillion yen (around US$116bn) to increase gross domestic product (GDP), create new jobs and boost growth.

Of the total amount, nearly 3.8 trillion yen will be spent on disaster prevention and reconstruction, while another 3.1 trillion yen will be spent to stimulate private investment.

As per the Japan's Cabinet Office, additional spending will hike GDP by around 2 percentage points and generate nearly 600,000 new jobs.

But, some analysts are of the view that the new government will not pay the required heed to fiscal discipline until next elections.

Hiroaki Muto, a Tokyo-based economist with Sumitomo Mitsui Asset Management Co., said, "Abe will probably give the economy more shots in the arm and turn a blind eye to fiscal discipline until the elections."

Muto cautioned that there was a risk that long-term bond yields would jump in case Abe didn't take measures to restore fiscal health of the country.

The Japanese government will collect a 13.1 trillion yen additional budget in the current financial year to pay for its stimulus package. Some of the money will come from selling around 5 trillion yen in bonds.