Japan’s new Prime Minister Sanae Takaichi is preparing an economic stimulus package expected to exceed last year’s ¥13.9 trillion ($92 billion), government sources revealed. The initiative her first major policy move since taking office on Tuesday signals Takaichi’s intent to pursue what she terms a “responsible proactive fiscal policy.”
The package will revolve around three central pillars:
- Countering inflation to ease the pressure on households,
- Investing in growth industries to sustain long-term competitiveness, and
- Strengthening national security amid global economic and geopolitical uncertainty.
While the final scale and details are still being worked out, the plan could be unveiled as early as next month.
Why It Matters
Takaichi’s stimulus marks a continuation of Japan’s big-spending economic tradition, but with a sharper focus on resilience and security.
Japan is facing persistent inflation, a weak yen, and global supply chain challenges, all of which threaten household purchasing power and economic stability.
As the country’s first female conservative prime minister, Takaichi is under pressure to balance fiscal expansion with Japan’s record-high public debt, while maintaining political momentum early in her tenure.
Government Insiders: Say the package reflects Takaichi’s determination to support consumers and stimulate investment in critical sectors like semiconductors and clean energy.
Economists: Divided some warn the plan could worsen debt sustainability, while others argue targeted spending is vital to prevent a slowdown.
Businesses and Households: Anticipate potential tax relief and subsidies, especially for energy and food prices that have risen sharply over the past year.
Global Investors: Watching closely to see if Takaichi’s fiscal approach will stabilize the yen and reignite growth without triggering inflationary pressures.
What’s Next
The stimulus outline is expected to be presented in November, followed by parliamentary approval before the end of the year.
Observers see this as a key test of Takaichi’s leadership style whether she can deliver quick relief to citizens while charting a strategic economic vision for Japan’s post-pandemic recovery.
Her success could define Japan’s fiscal trajectory and set the tone for future policy under her administration.
With information from Reuters.
