By Takaya Yamaguchi
TOKYO (Reuters) -Japan’s government will pledge to increase spending “without hesitation” to support an economy on the cusp of emerging from stagnation, according to a draft of premier Sanae Takaichi’s stimulus package seen by Reuters on Wednesday.
While the draft does not mention the size of spending, it calls for “bold and strategic” investment in crisis management and growth areas in a sign the package would likely include sizeable spending.
Describing Japan’s economy as in a transition period from one “prone to deflation and cost cuts,” the government will vow to spend “boldly without hesitation on necessary policies,” the draft showed.
The package will include subsidies to lower utility and gasoline bills, aid to businesses hit by higher U.S. tariffs and an expected increase in defence spending, the draft showed.
The government will also promote investment in key growth areas such as artificial intelligence (AI), semiconductors and shipbuilding, according to the draft.
Takaichi’s administration is expected to finalise the package later this month, and compile a supplementary budget for the current fiscal year to finance part of the spending.
“The size of the package will be quite large,” as Japan’s economy still needs fiscal support and the long list of areas the administration promises to invest in, analysts at Daiwa Securities said in a research note.
“We won’t be surprised if spending financed by the extra budget reaches 20 trillion yen ($133 billion),” they said.
($1 = 150.7800 yen)
(Reporting by Takaya Yamaguchi; Additional reporting and writing by Leika Kihara; Editing by Sam Holmes)
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