Overview
- The cabinet approved a ¥21.3 trillion package combining ¥17.7 trillion in general-account outlays and ¥2.7 trillion in tax cuts, the largest such step since the pandemic.
- Roughly ¥11.7 trillion is directed at price relief, including household energy subsidies through March, a one‑off ¥20,000 payment per child, regional funds, removal of a gasoline tax surcharge, and a higher income tax–free threshold.
- Markets weakened the yen to multi‑month lows and pushed super‑long government bond yields to record highs as investors questioned Japan’s fiscal trajectory.
- Officials plan to cover costs with higher tax revenue and additional government bond issuance, whose size is not yet set and is expected by some sources to exceed last year’s ¥6.69 trillion.
- The Cabinet Office projects an annual GDP lift of about 1.4 percentage points and a 0.7‑point reduction in consumer prices, while broader calculations that include loans and local spending put related measures near ¥42.8 trillion.