Japanese Prime Minister plans budget of almost US$19 billion for living costs

Japan's Prime Minister, Sanae Takaichi, plans to present a supplementary budget of almost US$19 billion to alleviate the impact of the rise in crude oil, caused by the conflict in the Middle East, on the cost of living.

"This supplementary budget aims to adopt all possible measures to minimize potential risks", said Takaichi at a press conference this Monday (25).

The package, worth more than 3 trillion yen (about US$18.84 billion), will be funded by issuing bonds to cover the budget deficit.

Takaichi stated, however, that the issuance will be offset by greater tax revenue, so that the stimulus will not increase the supply of bonds on the market.

"I believe this can be done without causing a material impact on the government bond market," he declared.

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Yields on JGBs (Japanese government bonds) have been rising strongly in recent sessions, amid concerns about war-driven inflation and Takaichi's expansionary fiscal agenda to address rising costs of living.

The prime minister also said that she intends to create a financial reserve to mitigate the effects of the conflict in the Middle East and provide subsidies for public service bills during the summer.

Although the oil shortage has fueled fears of rising prices, Takaichi said Japan likely has enough oil until next spring.

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Source: CNN