Japan Unveils Record $135.5 Billion Economic Stimulus Package

Comprehensive Measures to Boost Economy

Japan is preparing to launch a massive economic stimulus package worth $135.5 billion (Rp 2,265 trillion), marking one of the country's most significant economic interventions since the COVID-19 pandemic. The comprehensive plan includes multiple measures designed to stimulate consumer spending, support local governments, and control rising energy costs.

Key Components of the Stimulus Package

1. Direct Financial Assistance: Households will receive ¥7,000 per month for three months starting January 2026 to help with living expenses.
2. Energy Subsidies: The government will provide significant support for electricity and gas costs during the same period.
3. Increased Local Government Funding: Additional grants will be allocated to local authorities to support regional development initiatives.
4. Fuel Tax Relief: Plans include eliminating gasoline taxes to reduce transportation costs.

Economic Rationale

The stimulus comes as Japan faces slowing economic growth and rising inflation. By providing direct financial aid and energy subsidies, the government aims to boost consumer confidence and stimulate domestic demand. This approach reflects a broader strategy to strengthen economic foundations while maintaining price stability.

Significance and Market Impact

As Japan's largest stimulus package since the pandemic, this initiative demonstrates the government's commitment to proactive economic management. The measures are expected to have a significant impact on both domestic economic activity and regional development. Market analysts are closely watching the implementation details, particularly how the funding will be distributed and its potential effects on Japan's fiscal position.