The Cabinet of Prime Minister Naoto Kan endorsed a ¥5.05 trillion stimulus package Friday aimed at propping up an economy hampered by deflation and the surging yen.

The stimulus package is projected to add about 0.6 percent to economic output and create or retain 450,000 to 500,000 jobs. The government will draft a supplementary budget to finance the package and submit it to the Diet by the end of this month.

The ruling Democratic Party of Japan initially proposed a ¥4.8 trillion package but decided to hike it by ¥250 billion at the last minute due to strong pressure from coalition partner Kokumin Shinto (People's New Party).