Japan is rolling out a 900 billion yen (A$9.749 billion) emergency stimulus to counter United States President Donald Trump's latest tariffs, marking its first fiscal response to trade duties.
The package, which could reach 2.8 trillion yen ($30.332 billion) with local government spending, aims to shield businesses and households from rising costs.
With parliamentary elections looming, Prime Minister Shigeru Ishiba is moving swiftly to stabilise the economy and regain political ground.
The stimulus focuses on utility bill subsidies and corporate financing support.
It has 600 billion yen earmarked to curb electricity and gas price spikes and 300 billion yen set aside for struggling businesses.
The government plans to tap 388 billion yen from its reserve fund and secure low-interest loans to finance relief measures.
The move comes as Japan braces for a potential economic slowdown, driven by higher import costs and weak consumer spending.
The utility subsidy program, first introduced in 2023 under former Prime Minister Fumio Kishida, was designed to offset rising energy costs linked to Russia’s war in Ukraine.
It was also designed to offset yen depreciation.
While crude oil prices have since declined, critics argue that extending subsidies is a political maneuver ahead of the House of Councillors elections.
The government insists that the measures are necessary to protect households from inflationary pressures.
For investors, Japan’s stimulus strategy signals a commitment to economic stability, but questions remain about its long-term effectiveness.
The tariff battle with the U.S. adds uncertainty to trade and investment flows, while domestic political pressures could shape future fiscal policies.
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