What is the correct way to encode an inline javascript object, in order to protect it from XSS?

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It turns out the following which looks like valid javascript, is not:

<html> 
<body>
<script>
 json = {test: "</script><script>alert('hello');</script>"};
</script>
</body>
</html>

The same text, when returned JSON via an ajax api works just as expected. However when rendered in-line results in a basic XSS issues.

Given an arbitrary correct JSON string, what do I need to do server side to make it safe for in-line rendering?

EDIT Ideally I would like the fix to work with the following string as well:

json = {test: "<\/script><script>alert('hello');<\/script>"};

Meaning, I have no idea how my underlying library is encoding the / char, it may have chosen to encode it, or it may have not. (so its likely a regex fix is more robust)

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