A plan has emerged within Japan’s ruling coalition to deliver a cash handout as part of a package aimed at mitigating the pain of higher U.S. tariffs and persisting inflation on the country’s economy, sources familiar with the matter said Wednesday.
Some ruling bloc lawmakers have come up with a plan of providing between 30,000 yen and 50,000 yen, while others remain cautious about the possible program due to questions such as who should be eligible and how to fund it, the sources said.
The policy chief of Prime Minister Shigeru Ishiba’s Liberal Democratic Party told reporters that the ruling bloc should hammer out details in a cautious manner.
The move came after Chief Cabinet Secretary Yoshimasa Hayashi, the right-hand man of Ishiba, asked LDP’s chief policymaker Itsunori Onodera to consider what steps may be needed to support the economy, Onodera said.
“We’ll enhance relevant discussions by listening to various opinions,” Onodera said, mentioning the need to analyze the looming impacts of growing concerns about the Japanese economy.
The chair of the party’s Policy Research Council also told a TV program later in the day that the ruling camp and the government should make a decision on the possible cash handout plan “in a level-headed manner.”
“We must figure out what has been most affected (first). For now, we don’t need to say, ‘We can do it’ or ‘We cannot,'” Onodera said.
Hayashi, the top government spokesman, told a press conference that Ishiba’s administration has not considered compiling an extra budget for the current fiscal year to March 2026.
While Japan and the United States are due to begin minister-level talks on President Donald Trump’s move to impose tariffs, a 24 percent so-called reciprocal levy on Japanese products took effect on Wednesday in addition to a 25 percent duty on cars.
Japan has been hit by entrenched cost-push inflation, amplified by surging prices of rice, a staple food item, due largely to a poor harvest. Analysts say the higher U.S. tariffs will hurt the economy as the Asian country is heavily reliant on exports like cars.
© KYODO
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