Japan unveils 3 trillion yen budget to ease rising costs

Japanese Prime Minister Sanae Takaichi announced Monday that the government will compile a supplementary budget of about 3 trillion yen, equivalent to 19 billion dollars, to support households facing rising costs driven by the conflict in Iran. The budget is intended to ease the increasing prices of petrol, electricity, and gas, with Takaichi citing the uncertain situation in the Middle East as a key factor.

Takaichi told reporters that the government has drawn up the extra spending to ensure it is fully prepared financially, and said the draft would be submitted to parliament possibly next week. She stated that the government expects to be able to secure a stable supply of oil until next spring. She added that alternative supplies for naphtha, an oil byproduct used across many industries, from outside the Middle East have recovered to more than 80 percent of previous levels.

The extra budget will be financed by new deficit-financing bonds, but Takaichi said the measure could be implemented without affecting the bond market. She explained that the calendar-based issuance of government bonds would remain unchanged from the original plan, as stronger tax revenues, nontax income,...