Japan's government is considering an economic stimulus package exceeding 17 trillion yen to tackle rising prices. Finance Minister Satsuki Katayama revealed the scale after a meeting with Prime Minister Sanae Takaichi, as reported by Nikkei. Cabinet approval is slated for Friday.
Japan's government is considering an economic stimulus package worth more than 17 trillion yen, combining expenditures from the general and special accounts of the fiscal 2025 supplementary budget and major tax cuts. Under Prime Minister Sanae Takaichi's touted 'responsible, proactive fiscal policies,' spending is expected to significantly exceed the previous fiscal year's 14.8 trillion yen, with general account expenditures around 14 trillion yen, up from 13.9 trillion yen last year. The administration aims to enact the supplementary budget bill during the current extraordinary Diet session.
Key measures include subsidies for winter electricity and gas bills, providing each household with about 6,000 yen total over three months from January next year. Monthly subsidies range from 1,000 to 2,500 yen, higher for the colder January and February, doubling the previous 1,000 yen monthly aid from July to September. The government also plans to expand a priority support local grant program for areas like food purchase assistance, aiming to reduce household burdens by about 10,000 yen, including issuing rice coupons.
The Japan Innovation Party (JIP), the LDP's coalition partner, called for clear-cut measures to alleviate household burdens, leading to the abandonment of cash handouts proposed by the former Ishiba administration. Total support per household is likely to reach 50,000 yen, incorporating the abolition of provisional tax surcharges on gasoline and diesel oil—agreed by ruling and opposition parties—and income tax cuts from this fiscal year's tax reform.
Investments in strategic sectors include drawing up a roadmap for revitalizing the shipbuilding industry with 1 trillion yen from public and private sources. For mass-producing advanced semiconductors amid global demand, the government intends to support capital investments and develop infrastructure like power supply for data center locations. In healthcare, a new financing system will be created to improve management of private hospitals hit hard by rising prices.
Since taking office in October, Takaichi has pledged a sizeable package of spending measures to cushion the economic blow from rising living costs and boost investment in growth areas such as artificial intelligence and semiconductors. The package is expected to receive Cabinet approval as early as Friday, following coordination with the Liberal Democratic Party and the Japan Innovation Party.