Japan's cabinet greenlights $135 billion stimulus amid market concerns over Takaichi's fiscal policy
On November 21, Japan's ruling cabinet, led by Prime Minister Sanae Takaichi, approved a massive economic stimulus package worth 21.3 trillion yen ($135.4 billion). This is the first major policy move by the new administration, which has committed to an expansionary fiscal approach, raising concerns among investors and market participants.
Source Reuters
The package includes general government spending of 17.7 trillion yen, surpassing last year's 13.9 trillion yen, along with tax cuts totaling 2.7 trillion yen. It represents the largest stimulus since the COVID-19 pandemic. However, the aggressive fiscal measures have pushed the Japanese yen to a 10-month low and driven long-term government bond yields higher.
The coming period will reveal how effectively the government can balance strong economic stimulus with maintaining fiscal and financial stability amid market volatility.
