Japan Responds to US Tariffs... Emergency Injection of 900 Billion Yen

[Financial News Tokyo=Kim Kyung-min Correspondent] The Japanese government is preparing an emergency package in response to the tariff measures of the Donald Trump US administration, and will embark on fiscal spending totaling 900 billion yen (approximately 8 trillion 641.7 billion won). Of this, 380 billion yen will be covered by reserve funds, focusing on subsidies for electricity and gas bills, corporate funding support, and boosting consumption. The total project size, including local government and private funds, is expected to reach about 2 trillion 800 billion yen.

The Japanese government plans to make a cabinet decision on the 27th to include reserve fund spending, and will invest about 280 billion yen solely in subsidies for electricity and gas bills, which are key projects. In August, when electricity consumption surges, a subsidy of 2.4 yen per kWh will be provided, and in July and September, a subsidy of 2.0 yen will be given respectively. As a result, it is expected that the average household will be able to reduce their burden by around 1,000 yen per month based on the combined electricity and gas bills.

This measure is significant as it marks the first fiscal injection decision in response to US tariff measures. The government plans to prepare additional support measures in the future and secure funds by organizing a supplementary budget (additional budget) for the 2025 fiscal year in the autumn extraordinary Diet session.

Additionally, the government will carry out fiscal spending of about 300 billion yen to alleviate corporate funding difficulties and reduce export-import risks. It plans to strengthen financial support by utilizing the loan system of the Japan Finance Corporation and providing insurance through the Nippon Export and Investment Insurance.

Furthermore, 100 billion yen will be allocated from reserve funds to the Priority Support Local Grant, which allows local governments to promote projects to respond to price increases according to local conditions. km@fnnews.com