Takaichi's Big Bet on Japan’s Future 💴
This month, PM Sanae Takaichi pushed her cabinet to green-light an eye-popping 18.3 trillion yen ($117B) supplementary budget for FY2025. Her goal? Kickstart growth with what’s now dubbed "Takaichinomics."
Why the Buzz? 🔥
With the yen tumbling to around 157 per dollar on Nov 20—its weakest in 10 months—import costs have soared. Meanwhile, inflation hit 3.0% in October (core CPI), above the Bank of Japan’s 2% target. Yet Takaichi still favors holding off on big rate hikes, sticking to the monetary easing playbook she inherited from former PM Shinzo Abe.
Inside the 21.3T Stimulus Toolkit 🛠️
Her 21.3T yen stimulus package includes:
- Scrapping provisional gasoline tax ⛽
- Subsidies on electricity & gas bills for first 3 months of 2026 💡
- Rice vouchers & shopping coupons 🍚
- Cash handouts for families with kids 👨👩👧👦
- Higher tax-free income thresholds 💸
While these moves offer short-term relief, critics warn they do little to tame underlying price pressures—and might even add fuel to the inflation fire. 🔥
Experts Sound the Alarm ⚠️
Private data shows over 20,600 food items rose in price this year—a 65% jump from 2024. And despite big spending, real household incomes fell 0.1% in October. That’s because wage growth lags behind rising costs. Many young professionals juggling rent and groceries in places like Jakarta or Dhaka can relate.
Debt Mounts, Yields Climb 📈
Japan’s debt-to-GDP ratio now nears 240%—highest among advanced economies. To fund the new budget, 11.7T yen comes from fresh bond sales. As a result, the yield on the 10-year government bond hit 1.95% on Dec 5, the highest since July 2007. Higher yields mean borrowing costs jump, putting more pressure on public finances.
So, Will It Stick? 🤔
Is Takaichi’s big-spending play a bold move or just a band-aid? With critics calling "Takaichinomics" outdated and debt risks soaring, many are watching closely. One thing’s clear: Japan’s economic puzzle still needs solving—fast.
Reference(s):
Takaichi's bold fiscal push hard to resolve Japan's economic woes
cgtn.com
