Japan approves a 21 trillion yen economic stimulus plan, with more than half allocated for inflation relief

The Japanese Prime Minister Sanae Takaichi's cabinet has approved the largest supplementary spending plan since the pandemic, allocating funds through a comprehensive package to alleviate voter dissatisfaction. However, this move may raise concerns among investors closely monitoring Japan's fiscal situation, leading to the yen's exchange rate dropping to a 10-month low, while ultra-long-term government bond yields have surged to historic highs.

The Japanese Cabinet Office stated on Friday that this stimulus plan includes 17.7 trillion yen (approximately 112 billion USD) in general account expenditures. These expenditures are likely to be provided through a supplementary budget, marking a 27% increase compared to the scale introduced by its predecessor a year ago. The overall plan amounts to 21.3 trillion yen, with measures ranging from price relief to targeted investment support.

The Japanese cabinet plans to approve a supplementary budget to fund this plan as early as November 28, aiming to secure parliamentary approval before the end of the year. (Jin Shi)