Japan’s Prime Minister Sanae Takaichi (C) answers a question during a session of the House of Councillors Budget Committee at the National Diet in Tokyo on November 12, 2025. (Photo by Kazuhiro NOGI / AFP) (Photo by KAZUHIRO NOGI/AFP via Getty Images)
Kazuhiro Nogi | Afp | Getty Images
Japan’s cabinet reportedly announced a stimulus package totaling 21.3 trillion yen ($135.5 billion) on Friday, as Prime Minister Sanae Takaichi seeks to boost the country’s slowing economy and offer support to inflation-hit consumers.
Public broadcaster NHK reported that the package was based on three pillars: addressing rising prices, achieving a strong economy, and strengthening defense and diplomatic capabilities, according to a Google translation.
The cabinet also said it would expand local government grants, as well as provide subsidies for electricity and gas bills. The subsidies will start next January, amounting to about 7,000 yen for a standard household over a three-month period starting next January.
Taxes on gasoline will also be eliminated, according to the report.
Japan also plans to establish a 10-year fund to enhance shipbuilding capabilities, and enact measures to raise defense spending to 2% of its gross domestic product by fiscal year 2027.
The government said it will “swiftly compile” a supplementary budget bill to fund these measures, and plans to pass it by before year-end with help from opposition parties.
The ruling Liberal Democratic Party currently is a minority government, but is now allied with the Japan Innovation Party. Together they hold a 231 seats in Japan’s 465-seat Lower House — two seats short of a majority.
