What is Japan's new stimulus package amount?

Japan's new stimulus package amounts to ¥21.3 trillion.

How will Japan fund the stimulus package?

The package will be funded by higher-than-expected tax revenue, non-tax income, and potentially additional government bond issuance.

What is the expected impact of Japan's stimulus on GDP?

Economists expect the stimulus to lift Japan's GDP to 1.4% year-on-year in 2026.

Home / Business and Economy / Japan Unveils Massive Stimulus Amid Inflation Fears

Japan Unveils Massive Stimulus Amid Inflation Fears

22 Nov

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Summary

Japan's new PM approved a ¥21.3 trillion stimulus package.
The yen dropped to 10-month lows on the news.
Package could boost GDP to 1.4% in 2026.

Japan Unveils Massive Stimulus Amid Inflation Fears

Japan's Prime Minister Sanae Takaichi has introduced a substantial ¥21.3 trillion economic stimulus package, marking a significant fiscal move as the nation grapples with inflation and fiscal stability concerns. The cabinet officially approved the plan on Friday, featuring ¥17.7 trillion in general account outlays and ¥2.7 trillion in tax cuts.

Despite assurances of fiscal sustainability, market reactions were negative, with the Japanese yen falling to 10-month lows and long-term government bond yields reaching record highs. Investors are alarmed by the increased reliance on new government debt to fund the package, though the government plans to use higher tax revenues and non-tax income to cover costs.

Economists forecast that if approved by parliament, the stimulus could significantly boost Japan's economy, potentially raising GDP growth to 1.4% in 2026. The package includes energy subsidies intended to lower inflation in the short term, but ongoing core-core inflation and a weaker yen may counterbalance these effects.