Japan is considering spending over ¥1 trillion ($8.1 billion) on a new stimulus package to cushion the impact of surging energy, commodity and grain prices stemming from Russia's invasion of Ukraine, government sources said Wednesday.
The package will mainly see increased support for sectors that rely on fuel or grain, such as the transportation, agriculture, forestry and fishery industries, the sources said. Prime Minister Fumio Kishida instructed ministers a day before to start crafting the package by late April.
Kishida has said the fresh stimulus will be designed to help Japan's economy recover from the coronavirus pandemic and focus on four areas — oil prices, food supplies, funding support for small and midsized companies and assistance to people in need.
Businesses in the transportation and farm sectors have been especially impacted by the higher prices due to their reliance on gasoline, diesel and fuel oil for engines and grain for livestock feed.
Companies such as taxi operators and firms carrying people and goods to remote islands are expected to be eligible for the aid, the sources said.
To finance the package, the government and the ruling coalition plan to use some of the ¥5.5 trillion reserve funds in the fiscal 2022 budget. The funds include those set aside for the COVID-19 response.
The government aims to develop the framework of the package by mid-April and receive Cabinet approval to use the reserve funds later that month, the sources said.
Ahead of the Upper House election in the summer, the government is considering drafting an extra budget for fiscal 2022 to put together another relief package.