Abe announces new stimulus

It's hoped the cash injection will make the economy grow by 2 per cent and create 600,000 jobs.

The government is putting up 10.3trn yen (£72bn), including 3.8trn yen (£26bn) for infrastructure and cleaning up after the 2011 earthquake and tsunami.

Japan's economy is in poor shape and has been hit hard by a Chinese boycott of Japanese goods the countries row over a disputed island chain.

The Japanese government bought the East China Sea islands from private owners last year, sparking violent protests in China.

And Mr Abe's comments today were unlikely to help matters.

He said it was "wrong" for China to allow violent protests directed at Japanese interests in the country.

China rejected Mr Abe's interpretation and said the islands belonged to China and the unrest was Japan's fault.

China's Defence Ministry also said it had scrambled two fighter jets near the disputed islands on Thursday after a Chinese surveillance plane reported being followed by two Japanese fighters.

The ministry said the Japanese military was increasingly following Chinese aircraft.

A spokesman said China "will resolutely protect the security of its air defence force and uphold its legitimate rights."

The new stimulus package includes plans to increase military spending, in part to keep a tight grip on the islands.