Japan's government on Friday unveiled a new stimulus package with spending worth 39 trillion yen ($260 billion) that it said would boost gross domestic product (GDP) by around 4.6 percent.

The government said it would compile an extra budget in the current fiscal year worth 29.6 trillion yen to fund the package.

The country's central bank is refusing to budge from the ultra-loose policy that has hammered the currency this year, wiping out more than 20 percent of its value against the dollar.

In a document detailing the package, the government also expressed hope the Bank of Japan would pay attention to the impact financial market moves could have on the economy.

The government hopes the 39 trillion yen in fiscal spending will rise to 72 trillion yen when private sector investments are taken into account, Prime Minister Fumio Kishida said on Friday.

"This ... is a comprehensive economic package meant to combat inflation and revitalize the economy," Kishida said on Friday.

Prices are rising in Japan at their fastest rate in eight years, although the 3-percent inflation rate remains well below the sky-high levels seen in the U.S. and elsewhere.

Japan, which has one of the world's highest debt-to-GDP ratios, has already injected hundreds of billions of dollars into its economy over the past two years to help it recover from the COVID-19 pandemic.

Friday's package will include measures to encourage wage growth and support households with energy bills, which have spiked since February.

It is also designed to help people and businesses affected by the plummeting yen, currently at 147 against the dollar.

Japan spent nearly $20 billion in September to curb the yen's slide, and further expensive government interventions have reportedly taken place in recent days.

The yen's steep falls have been driven by the widening gap between the monetary policies of the U.S. and Japanese central banks – with the Bank of Japan keeping rates ultra-low to encourage sustainable growth, while the Federal Reserve ramps them up.

(Sources: Reuters, AFP with edits)