Japan PM Sanae Takaichi Plans Over $92B Stimulus to Combat Inflation

Japan's newly elected Prime Minister Sanae Takaichi, the first woman to hold the position, is preparing a major economic stimulus package exceeding 13.9 trillion yen (about $92 billion) as her first policy initiative to combat inflation and support households. The stimulus plan focuses on three main pillars: relieving inflation pressures through measures like abolishing the provisional gasoline tax and expanding local government subsidies, investing in growth sectors such as artificial intelligence and semiconductors, and strengthening national security spending. To finance the package, a supplementary budget for the current fiscal year is being drafted, with the possibility of issuing deficit-covering bonds if expenditures exceed expectations, raising concerns about fiscal discipline amid Japan's heavy debt burden. The package notably does not include cash payments, reflecting public sentiment from recent elections, and emphasizes strategic, growth-oriented fiscal policy rather than broad spending. Market reactions were positive, with Japan's stock indexes climbing and the yen stabilizing following the announcement. Takaichi's approach marks a shift towards balancing fiscal responsibility with proactive economic stimulus to address the cost-of-living crisis and promote sustainable growth.