Japan Mulls About Stimulus Package

last updated on

Japan Mulls About Stimulus Package

Japan Mulls About $87 Billion Stimulus Package

According to media reports, Japan's government is thinking about a supplementary budget worth $87 billion. This will be used to fund the new stimulus package aimed at helping low-income households.

The stimulus package will also help Japanese consumers to fight against rising prices. If it happens, it will be a big step for Japan and will have a major impact on the JPY.

Government To Support Low-Income Households

The plan states that the government will provide $193 or 30K Yen to low-income families. The government will also provide 20K Yen for each child in the family. To counter the higher fuel costs, the government will also provide subsidies for gas & electricity prices.

However, the government is thinking about ending the subsidy on gasoline fuel. But despite this, the government has spent almost 11 trillion Yen during the last 3 years to support Japanese consumers.

According to the details, the Japanese PM will announce the package on 22nd November 2024. As of now, the exchange rate of USD/JPY is around 155.37.

Now, if this turns out to be true, it would mean more weakness for the Japanese Yen. Everyone knows that the JPY is already weak, but this stimulus package will further reinforce its bearish trend.

In that case, the USD/JPY could even cross the 160.00 threshold and move towards the next target at 165.00. But this also raises the fear of the BoJ's intervention.

The situation will become difficult if the government decides to go ahead with this proposed fiscal package.

This will also be the opposite of the BoJ's policy, which is to move away from the policy easing. At the same time, it will also complicate the government's effort to raise the inflation and the interest rates along with it.

However, all of this is still not confirmed and we can't get ahead of ourselves with just media reports.

Trending Stories