Takashi Nishimura’s first economic stimulus package after assuming office is revealed—its scale may exceed 13.9 trillion yen!

Japan’s newly appointed Prime Minister Sanae Takaichi is moving forward with her first major economic initiative since taking office. A stimulus package aimed at countering inflation is currently under preparation, with a potential scale exceeding 13.9 trillion yen. It will be structured around three core pillars: tackling inflation, investing in growth-oriented industries, and strengthening national security. According to media reports on the 22nd, Takaichi ordered the formulation of a new comprehensive economic package on Wednesday, designed to alleviate the burden of inflation on households and businesses. This marks her first significant economic action following her inauguration on Tuesday as Japan’s first female prime minister. Funding for the plan will be secured through a supplementary budget. The specific measures reflect a targeted approach: subsidies for winter electricity and gas bills; grants to local governments to ease regional price pressures; and incentives for small and medium-sized enterprises (SMEs) to raise wages and increase capital investment. For investors, this signals the government’s preference for precisely calibrated support measures—not broad-based cash handouts, which failed to win public support in the nationwide elections held in July. Citing informed government sources, media reports indicate the package’s scale may surpass last year’s 13.9 trillion yen (approximately USD 92.19 billion), with an announcement potentially as early as next month—though the final figure remains under discussion. The plan’s central objective is to relieve household cost-of-living pressures while simultaneously addressing Japan’s long-term structural challenges. Locking in the “Three Pillars” Based on official directives and information from insiders, this stimulus package will revolve around three clearly defined pillars. First—and most urgent—is combating inflation and rising living costs. Concrete measures include direct subsidies for household energy bills, grants to local governments to counteract price pressures, and incentives for SMEs to raise wages. Second, the package will significantly invest in strategic sectors expected to drive future economic growth. Artificial intelligence and semiconductors are explicitly named—aiming to bolster Japan’s position in global technological competition. The third pillar focuses on enhancing economic security and defense. This component encompasses not only strengthening supply-chain resilience for critical goods but also measures to respond to U.S. tariff policies.

Japan’s three major household subsidies will be extended until March next year! Will there also be point-based subsidies for food purchases?

The Bank of Japan released the preliminary Corporate Goods Price Index (CGPI) for September (with 2020 average = 100) on October 12, reporting a value of 119.3—a 2.0% year-on-year increase. Although prices continue to rise, the rate of increase has slowed for the ninth consecutive month. Among the 515 items surveyed, prices rose for 424 items. However, prices fell for lumber and wood products, as well as for electricity, city gas, and water—commodities whose prices had surged sharply since last year. Toshihiro Nagahama, Chief Economist at Dai-ichi Life Research Institute, attributes this moderation largely to the impact of government subsidy measures. In response, the Japanese government is now discussing extending the gasoline subsidy—which expires this year—through the end of March next year. Extensions are also under consideration for electricity and city gas subsidies, aiming to ease financial burdens on households and small-to-medium enterprises struggling with rising prices. Currently, the government provides subsidies of 7 yen per kilowatt-hour for household electricity and 30 yen per cubic meter for city gas. As of October 5, the gasoline subsidy rate was raised to 60% for prices between 168 and 185 yen per liter; for prices exceeding 185 yen, the subsidy covers the full excess amount. Details—including the level and duration of extended subsidies—will be formally negotiated going forward and incorporated into the new economic measures scheduled for late October and the supplementary budget for fiscal year 2023. Meanwhile, the Bank of Japan is reportedly considering revising upward its forecast for FY2023 consumer price inflation—from 2.5% to nearly 3%—to reflect unexpectedly persistent price increases. Against this backdrop of unrelenting price hikes, public economic pressure continues mounting, prompting political parties across Japan to propose new subsidy policies. Komeito Party has proposed three “citizen return policies” as part of the new economic measures: 1. A uniform cash payment targeting households subject to resident tax—or those exempt from it—particularly vulnerable to rising prices; 2. Income tax reductions to support working-age individuals and middle-income households; 3. Extension of subsidies for gasoline, electricity, and city gas through March next year—to help manage surging winter heating demand and meal-related expenses.

Japan Open to Winter Fuel Subsidies to Soften Heating Bill Blow

21 hours ago

Japan considers implementing winter gas and electricity subsidies funded by budget reserves to alleviate rising heating costs. Chief Cabinet Secretary Minoru Kihara stated the government aims to take appropriate measures in a timely manner when needed.

reuters

2026-10-21

Japan Open to Winter Fuel Subsidies to Soften Heating Bill Blow

Japan Open to Winter Fuel Subsidies to Soften Heating Bill Blow

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