Japanese Prime Minister Sanae Takaichi’s cabinet approved a multi-billion dollar stimulus package on Friday, fulfilling the new leader’s promise to adopt an expansionary fiscal policy.
The stimulus, valued at JPY 21.3 trillion ($135.40 billion), includes general account expenditures of JPY 17.7 trillion, significantly larger than last year’s JPY 13.9 trillion, marking the largest fiscal effort since the COVID pandemic. The package also encompasses JPY 2.7 trillion in tax reductions.
The initiative aims to alleviate the inflationary pressure on households and businesses, as reported in the media—this strategy may contradict traditional economic perspectives that suggest stimulus tends to induce inflation.
Nonetheless, bitcoin, often viewed as a safeguard against inflation and fiscal mismanagement, fell 0.8% to $85,480, continuing a recent decline that saw prices drop from a record high of $126,000 achieved on Oct. 8.
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