Tokyo approves ¥3.1 trillion supplementary budget to offset rising fuel and utility costs amid Middle East tensions.
Japan’s cabinet passed a ¥3.1 trillion ($19 billion) supplementary budget to subsidize fuel and utility costs, targeting inflation driven by Middle East conflict. The package includes a ¥2.5 trillion reserve for gasoline price controls and broader utility support.
The budget is fully funded by deficit-financing bonds, with overall bond supply unchanged due to canceled prior-year debt and stronger revenue projections. The move follows yen weakness near the 160-per-dollar intervention threshold, adding pressure on Japanese government bonds (JGBs).
Prime Minister Sanae Takaichi framed the spending as a response to prolonged energy cost risks, reviving fiscal policy as a key concern for investors.