Japan has launched a 210 trillion yen economic stimulus plan, with more than half allocated for inflation relief.

On November 21, Japan's Prime Minister Fumio Kishida's cabinet approved the largest supplementary spending plan since the pandemic, allocating funds through a package to alleviate voter dissatisfaction. However, this move may raise concerns among investors closely monitoring Japan's fiscal situation, resulting in the yen's exchange rate falling to a 10-month low, while long-term government bond yields surged to historical highs. The Japanese Cabinet Office stated on Friday that this stimulus plan includes 17.7 trillion yen (approximately 112 billion USD) in general account spending. This spending is likely to be provided through a supplementary budget, marking a 27% increase compared to the scale introduced by its predecessor a year ago. The overall plan amounts to 21.3 trillion yen, with measures ranging from price relief to support for key sector investments. The substantial scale of price relief funding underscores Kishida's determination to address persistent inflation, which has exacerbated voter dissatisfaction and led to the resignation of his predecessor. Data released on Friday showed that Japan's key price index has remained at or above the Central Bank's 2% target for 43 consecutive months, setting the longest record since 1992. The Japanese cabinet plans to approve a supplementary budget to fund the plan as early as November 28, striving to secure parliamentary approval before the end of the year. (Jin10)