Japan’s parliament approved a 21.3 trillion yen ($135 billion) stimulus package on Friday, paving the way for one of the country’s biggest spending efforts since the pandemic. The government aims to revive consumption and strengthen several strategic industries.
The plan allocates 17.7 trillion yen for general spending and 2.7 trillion yen for temporary tax cuts, with the remaining funds directed toward subsidies and targeted support programs.
Lawmakers expect to finance the measures through a supplementary budget that is set to be finalised later this month.
Prime Minister Sanae Takaichi’s new administration has presented the package as crucial for sustaining Japan’s economic recovery. It also aims to boost competitiveness in key growth areas such as semiconductors, artificial intelligence, and shipbuilding.
The package includes direct payments designed to ease pressure on households struggling with rising living costs.
Financial markets responded cautiously. The yen edged higher after recently touching a 10-month low, while long-term government bond yields strengthened. These moves reflect investor concerns about Japan’s rising public debt levels and the risks tied to aggressive fiscal expansion.
