MNI BRIEF: Japan’s Govt Approves JPY21.3 Trln Economic Package

The Japanese government on Friday approved a comprehensive economic package worth JPY21.3 trillion ($135 billion) at a cabinet meeting, marking the first major economic policy move under Prime Minister Sanae Takaichi, who has advocated “responsible and proactive public finances,” the Nikkei reported.

Of the total, JPY11.7 trillion – including tax cuts – will fund measures to ease the impact of rising prices on households, while JPY7.2 trillion is earmarked for growth-focused investments in sectors such as semiconductors, artificial intelligence, and shipbuilding.

The package will be supported by a supplementary budget of JPY17.7 trillion from the government’s general account – JPY4 trillion higher than last year. Including special accounts, total fiscal spending will reach JPY21.3 trillion.

Japanese government bond yields rose broadly following the announcement, reflecting concerns over fiscal sustainability under Takaichi’s expansionary policies and higher inflation linked to the weak yen.