Japan is expected to announce a massive stimulus package today to cushion its economy from the effects of a weak yen and inflation.
Japanese Prime Minister Kishida Fumio said he would call for “quick approval” of the 29.1 trillion yen supplementary budget before the cabinet approves relief measures.
The government is preparing to allocate around $490 billion in stimulus packages to help the world’s third-largest economy deal with inflation. Inflation in Japan is now rising at its fastest rate in eight years, but its 3% inflation rate is well below the highest levels seen in the United States and elsewhere.
Inflation in Japan is now rising at its fastest rate in eight years, but its 3% inflation rate is well below the highest levels seen in the United States and elsewhere. Yen has also fallen by more than a fifth against the dollar this year, and authorities are stepping in to support the currency.
Local media, including the Nikkei Business Daily, cited by AFP, said the total budgetary expenditure for these measures could reach 39 trillion yen. Japan, which has the world’s highest debt-to-GDP ratio, has already poured hundreds of billions of dollars into its economy over the past two years to support its recovery from the COVID-19 pandemic.
After a two-day meeting on Friday, the Bank of Japan (BoJ) said it would continue to stick to its loose policy, ignoring growing pressure to adjust its strategy following the yen’s fall. Interestingly, India is on the verge of overtaking Japan to become the second-largest economy in Asia and the third-largest economy in the world.
