Japan announces $113 bn package to counter inflation woes 

Japanese Prime Minister Fumio Kishida unveiled a comprehensive$113 billioneconomic package, aimed at controlling the effects of surging inflation.

The proposed package encompasses various strategies, including temporary cuts to income and residential taxes, along with subsidies intended to alleviate the burdens of escalating gasoline and utility bills.

According to Reuters, the government plans to compile a supplementary budget of 13.1 trillion yen for the ongoing fiscal year in order tofinance a significant portion of the expenditure.

The prolonged period during which inflation has consistently exceeded the central bank's two per cent target has been taking a toll on consumer spending and casting a shadow on Japan's economic recovery.

The ever-increasing cost of living has played a pivotal role in driving down Kishida's approval ratings, putting immense pressure on him to alleviate the hardships faced by households.

While the prime minister acknowledges that economic growth remains strong, wage increases have been insufficient to counterbalance the surge in prices. As a solution, he envisions returning a portion of the expected increase in tax revenues generated by the robust economy back to households, effectively cushioning the impact of inflation.

The latest move comes close on heels of the Bank of Japan allowing 10-year government bond yields to rise above 1 per cent, in response to the yen's weakening over the previous 18 months.

(With inputs from Reuters)

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