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Japan’s Prime Minister Taro Aso wants his new economic stimulus to exceed 2 percent of gross domestic product, an indication the package will be his largest since taking office in September.

Aso ordered “spending to exceed 2 percent of GDP,” or 10 trillion yen ($100 billion), Finance Minister Kaoru Yosano told reporters in Tokyo today after meeting with the premier. The government aims to compile an outline of the measures by April 10, Yosano said.

The government is trying to revive an economy that’s heading for its worst recession since 1945 as a collapse in exports forces companies to fire workers and cut production. Group of 20 leaders last week pledged to spur growth amid signs that the global economy is beginning to recover from its worst financial crisis since the Great Depression.

“We’re seeing some bright signs but they’re not enough to bring forward the timing of a recovery,” Fujio Mitarai, chairman of the Japan Business Federation, said in Tokyo today. “We applaud efforts to beef up stimulus measures.”

While the Nikkei 225 Stock Average’s 17 percent advance since February and a weaker yen have provided some relief, data last week showed business sentiment plunged to a record low and the unemployment rate rose to a three-year high.

Yosano said the spending will focus on the job market, providing credit to companies, energy-efficient technology and welfare health insurance plans. Aso has unveiled two packages totaling 10 trillion yen.

Limited Room

Japan has limited room to spend more to revive growth, with its public debt burden likely to surge to 197.3 percent of GDP next year, the Organization for Economic Cooperation and Development said last week. The world’s second-largest economy will shrink 6.6 percent in 2009, the most since 1945 and steeper than declines of 4.1 percent in the euro area and 4 percent in the U.S., the OECD forecasts.

The International Monetary Fund recommends that stimulus spending be equivalent to at least 2 percent of a nation’s economy.

Vice Finance Minister Kazuyuki Sugimoto, the ministry’s top bureaucrat, said the funding for the measures will be decided after the package is announced. He said the government hasn’t decided whether the spending will be for this year or spread over several years.

The Finance Ministry today said loans from the state-owned Development Bank of Japan and Shoko Chukin Bank Ltd. to medium- to large-sized companies had reached about 1.3 trillion yen since December, according to a Kyodo News report.

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