FOCUS: Concerns Grow over Japan’s Massive Fiscal Spending under Takaichi

Tokyo, Nov. 22 (Jiji Press)–A large-scale economic package adopted by the government of Japanese Prime Minister Sanae Takaichi on Friday has sparked worries about massive fiscal spending.

The package, worth 21.3 trillion yen in terms of government spending, is the first under Takaichi, who took office a month ago.

General-account spending under the government’s planned fiscal 2025 supplementary budget to finance measures in the package is expected to total roughly 17.7 trillion yen, up sharply from 13.9 trillion yen under the fiscal 2024 extra budget and the largest since the end of the COVID-19 pandemic.

The new Japanese leader, who is eager to leverage fiscal spending to achieve high economic growth under the banner of “responsible and proactive” public finances, does not rule out the possibility of increasing the issuance of Japanese government bonds.

With the Japanese government continuing to compile large-scale supplementary budgets even after the end of the pandemic, however, financial markets’ confidence in the country’s public finances and its currency is apparently starting to wane.

[Copyright The Jiji Press, Ltd.]