The chairman of the Japan Federation of Employer's Associations (Nikkeiren) urged the government on Wednesday to draw up a second supplementary budget.
Hiroshi Okuda called for fiscal spending totaling 5 trillion yen, including what was earmarked in a supplementary budget formalized earlier in the day.
The Cabinet approved a 3 trillion yen supplementary budget Wednesday, but fresh fiscal expenditure only amounts to 1 trillion yen.
Okuda, also chairman of Toyota Motor Corp., said that the economic situation has changed, noting that the first supplementary budget was inked out before the Sept. 11 terrorist attacks in the United States.
"When the first supplementary budget was drafted, it was before the terrorist attacks and the slump in the information technology sector was about the only major negative impact (taken into account)," he said.
Okuda said the economy is expected to further decline as structural reform proceeds and banks dispose of bad loans.