TOKYO—Japanese Prime Minister Shinzo Abe on Saturday approved a $29.17 billion stimulus package meant to boost consumer spending and regional economic activity, seeking to revive an economy in recession.

The spending package focuses on small businesses, rural communities and post-disaster reconstruction. Its passage marks the first major act by Mr. Abe’s new cabinet since his party’s decisive win this month in an election he had framed as a referendum on his economic policies.

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