Japan Cabinet approves the ¥55.7 trillion fiscal stimulus package

A record-breaking stimulus injection for Japan

• Government to compile extra budget worth ¥31.9 trillion
• Will set aside ¥5 trillion in reserves next year for emergency spending
• Hopes BOJ works closely with government, take appropriate monetary policy steps

It is expected that the stimulus package will boost Japan GDP by around 5.6% with most of that effect taking place in Q1 2022 and the early part of the next fiscal year.

Kishida will be hoping the measures introduced will be able to get the economy back up on its feet again, otherwise he may face rather intense scrutiny considering the magnanimous size of the stimulus package.

For some context, Japan had spent roughly ¥88 trillion (nearly 17% of GDP) since the start of the COVID-19 pandemic last year. So this is nearly two-thirds of that.