Tokyo, October 22:

Japan’s newly appointed Prime Minister Sanae Takaichi is preparing a sweeping economic stimulus package aimed at easing the burden of inflation on households and boosting strategic industries. According to government sources familiar with the discussions, the package is expected to exceed last year’s $92 billion plan, underlining Takaichi’s commitment to what she describes as a “responsible proactive fiscal policy.”

The proposed package, estimated at over 13.9 trillion yen (approximately $92.19 billion), represents the first major policy initiative of Takaichi’s administration since she assumed office on Tuesday. Known for her advocacy of expansive fiscal measures, the new Prime Minister appears determined to balance inflation relief with long-term growth strategies.

Sources indicate that the stimulus will revolve around three central themes — combating inflation, investing in future growth sectors, and strengthening national security. While details are still being finalized, the initiative is expected to include direct measures to lower living costs, financial support for small businesses, and heavy investment in cutting-edge industries such as artificial intelligence and semiconductors.

In one of the plan’s core measures to curb inflation, the Takaichi administration is expected to abolish the provisional gasoline tax rate, a move aimed at providing immediate relief to consumers struggling with rising fuel prices. Additionally, the government plans to expand local government grants to aid small and medium-sized enterprises (SMEs) that have so far been unable to take advantage of tax incentives for wage increases.

These steps, officials say, are intended to ensure that economic recovery efforts reach all sectors of society, not just large corporations. “The goal is to deliver tangible benefits to households and smaller businesses that form the backbone of Japan’s economy,” said one government source.

Beyond inflation relief, the stimulus will prioritize investments in growth sectors that can strengthen Japan’s long-term competitiveness. Funding for artificial intelligence, semiconductor research, and digital infrastructure is likely to be a major focus, aligning with Japan’s broader strategy to secure its economic and technological future amid rising global competition.

Financial markets reacted cautiously to early reports of the upcoming stimulus. The Nikkei share index reversed morning losses and turned higher in the afternoon, while the yen, which had strengthened earlier in the day, pared gains and stabilized. Analysts say the initial market response reflects optimism that the new government is taking swift steps to stabilize the economy.

The total size of the package is still under discussion and may be announced as early as next month. To finance the measures, the government is preparing a supplementary budget for the current fiscal year ending in March. However, if spending exceeds current projections, Tokyo may need to issue additional deficit-covering bonds — a move that could spark debate about Japan’s growing public debt and the balance between fiscal stimulus and financial discipline.

For Prime Minister Takaichi, the upcoming package will serve as a defining test of her economic leadership. As inflation continues to pressure consumers and energy costs remain elevated, her administration faces the dual challenge of reviving growth while maintaining fiscal credibility — a balance Japan has long sought to achieve.

 Japan’s New PM Plans Major Economic Stimulus

Japan’s new Prime Minister Sanae Takaichi is preparing a massive economic stimulus package exceeding $92 billion to help citizens tackle inflation and boost growth. The plan, focused on inflation relief, investment in key industries, and national security, will be her first major policy move since taking office. Key measures include abolishing the provisional gasoline tax and increasing grants for small businesses. The package will also invest heavily in artificial intelligence and semiconductor sectors. A supplementary budget is being drafted to fund the initiative, which may be announced next month to support Japan’s economic stability.