Business News

Japanese Prime Minister Shigeru Ishiba's cabinet approved a stimulus package that's slightly bigger than last year's, as he followed up on a pledge to ramp up support for households and businesses struggling to cope with higher costs.The stimulus lays out fiscal spending of 21.9 trillion yen ($140 billion) on measures to support sustained wage gains and cash handouts for low-income households, subsidies for gas and electricity bills, and investment into the semiconductor and AI sector, according to the Cabinet Office on Friday."The most important thing is to raise wages for all generations," Ishiba told reporters earlier in the day. "This needs to happen now and in the future."Delivering on a promise to provide a bigger spending package than last year was a key checkbox that Ishiba needed to tick as he looks to shore up his leadership of a minority government.Ishiba struck a deal this week with the Democratic Party for the People to shore up enough support for his stimulus plan. That deal provides Ishiba with a template for sustaining his Liberal Democratic party-led minority government ahead of other looming challenges, including an annual budget for the next fiscal year.After losing its majority in a lower house election on Oct. 27, the ruling coalition needs the votes of at least one of the three largest opposition parties to pass legislation in parliament."It could go horribly wrong at any point for the LDP if the coalition loses the DPP or other alternatives," said Rintaro Nishimura, a Japan associate at The Asia Group, an advisory firm.Of the measures laid out in the package, around 10.4 trillion yen of fiscal spending will be earmarked for economic growth, 4.6 trillion yen for price-relief measures, and ¥6.9 trillion for other economic, social and security measures including disaster management.The overall working size of the package will reach around 39 trillion yen, according to the cabinet office, a figure that relies on projected spending from the private sector. The actual cost of the measures is closer to ¥13.9 trillion, in line with a figure seen earlier by Bloomberg in a draft of the package.The agreement on the package puts Ishiba on a firmer footing after recent opinion polls showed underwhelming public support for his cabinet. A survey published by public broadcaster NHK this week showed public approval at 41%, relatively poor for a new administration. Ishiba launched his new cabinet lineup on Nov. 11.