Japan Extra Budget: Updated Dec. 22, 2025.

Japan Diet enacts 18 tril. yen extra budget for PM's expansionary stimulus

Article source:  https://mainichi.jp/english/articles/20251216/p2g/00m/0na/035000c

Ideas:

Japan has tried many times, with other supplementary budgets to try and improve the Japanese economy with not much success. This is no guarantee that the new budget, other than increasing the government debt,will have any effect on the economy.

Japan has many economic structural problems besides the inflation situation which is constraining the Japanese economy. Until Japan addresses the structural challenges the economy is going to be stuck in first or at best second gear and not growing much at all.

like any bill and drafts of a bill it probably went through many revisions as a bill rarely gets passed as it is but due to political tensions there are always going to be some or many changes before its passed.

The Japanese government knows full well that is debt to GDP ratio is the highest in the world but it has to decide what is most important, reducing the government debt or finding ways to  help the economy, even if that means spending more and increasing the debt.

Many bills always include some parts that the leading party didn't need to want but they need help from other parties to pass the bill so they include parts that other parties want and need in the bill.

Again, despite the new Prime Ministers best attempts to find ways to improve the economy,  past Prime Ministers, with good intentions, just couldn't improve the Japanese economy with their new bills or new budgets.

The new Prime Ministers ideas are good and needed but again there is no guarantee that the new bill will do anything but increase the debt. Yes, there might be some improved business confidence and maybe some improved consumer confidence but can it be sustained in the long run to get the economy moving again.

Trying get a decrease in living costs for Japanese families might be out the control of the Japanese government other than giving handouts and subsidies which are at best short-term solutions to solving the challenges related to the Japanese economy.

Yes, Japan fiscal situation is not the best and is the worst among the Group of Seven economies, might be the worst among the G 20 economies and is probably the worst among OECD economies.

But the Japanese government has to decide what is the most important challenge at the present time, improving the lives of Japanese families or trying to reduce the current debt situation.

The selling of government bonds seems to be a common strategy of the Japanese government, and maybe globally many governments do it when they need more money to finance whatever they need.

Of course selling government bonds might work in the short-term but again it increases the overall debt of a government, but in this case maybe the Japanese government feels it has no choice but to increase the debt to get money for the relief steps of subsidies and cash handouts in the new budget bill for Japanese families.

Just what is a crisis management situation that a government needs 6.4 trillion yen again as is its going to increase the debt and will the 6.4 trillion yen actually do what it's intended to do.

Not to keep commenting on the same thing, but past Japanese governments too has significant supplementary budget bills to improve the Japanese economy and the lives of Japanese families but most helped in the short-term but in the long-term didn't do much to help.

Japan seems to be more concerned with China these days and feels it needs to increase its defense budget as a way to offset China's defense spending.

And at the same time appease the current US government has been pressuring the Japanese government to increase its defense budget.

As always opposition lawmakers rarely like a bill that is passed or intended to be passed unless it has something in it for them. And then there is the budget measures that are not the most important and maybe could wait until the new fiscal year in April to be implemented into a new bill.

But what is urgent or needed, it seems, its the need for relief measure to help Japanese families with cash handouts and subsidies related to electricity and gas which again might help in the short-term but in the long-term might not help much at all.

Have a nice day!

Japan Govt. Back to Pre-Pandemic Normal? Updated March 2, 2024.

 

Pivot to pre-COVID normalcy tests Japan's fiscal spending appetite

Article Source: https://mainichi.jp/english/articles/20231223/p2g/00m/0bu/051000c

Ideas:

Many governments always say they are going to reduce spending as a way to reduce their bloated budget, but something always gets the way with emergency programs, or other new emergency situations, and so it never really happens.

And don't expect the Bank of Japan to make any real changes to its currents policy anytime soon as they might make small incremental changes here or there, but nothing significant in the near future.

Companies might, again, increase wages in April of 2024 as in April of 2023, but the challenge will be if small and midsize companies can afford to increase wages.

Whether the Japanese economy moves past the deflation stage all depends on wage increases, consumer demand and consumer spending, and not so much on companies passing-on their material costs.

Current Prime Minister Kishida, might try to depart from the Abe policies, but its going to be hard to change much within the LDP as they control everything. And to be fair, its not known just how much the Japanese Prime Minster can change much, as they need a consensus to change policies.

The Japanese cabinet and the Japanese Prime Minister have never had complete support of the Japanese public, as it seems to the Japanese public is/was resigned to anything changing despite their lack of support for any current cabinet or prime minister.

As far as the US economy goes, the US seems to have move out of its recession worries and the inflation in the US economy is almost back to normal and the US economy, at this time, again, is the strongest economy in the world.

Its normal for societies to get used to the massive support, whether related to the covid situation or any other situation, and many times, it takes a while for society to get back to normal without relying on massive aid programs.

Prime Minister Kishida, like many politicians change when they get into office and have to deal with all of the challenges an economy faces. He might have been a fiscal hawk, meaning, he didn't like a lot of government spending, but again the needs of society change many politicians. 

Many times, in government, people around the president or in this case the Prime Minister don't want to rock the boat and wont suggest any changes against what the Prime Minister wants.

The new 2024 might be the first time in 12 years it has decreased, and might be the second-largest on record, but by the end of fiscal 2024, it might increase a lot more as more spending programs are added, as new emergency situations occur.

For debt-servicing, most likely, as usual, the Bank of Japan will offer and buy more government bonds to cover the costs of the current bond situation.

The Japanese economy, to get out of deflation stage, needs to have an increase in consumer spending, and increase in consumer demand, and a significant increase in wage growth, and not just from large companies but small and midsize companies too.

The BOJ's policy tweak might be a move to help increase the above economic conditions, but maybe they its too much as 1.9 percent, at this time.

Again, even though the Japanese government and the Bank of Japan want to lower the debt, most likely its not going to happen just yet, as there are too many variables that need to be in place yet, before the debt can be reduced.

Government plans never really stay the same, so no matter what the plan is for the future, there are always going to emergency situations that come up that derail budget plans and government spending always increases.

The a long time, decades, the Japanese government depended on the US military and the treaties protecting Japan. But this is a era, with China becoming more of a threat every years and maybe Japan feels it needs to increase it defense spending as a way to deter China.

Tan hikes or sales tax increases are not very popular with the Japanese public as was seen in 2014 and 2019, with a 5 percent increase to 8 percent and a then to 10 percent in 2019.

The time might come with again, the Japanese government feels it needs to increase the sales tax, especially if it can get out of the deflation stage its in now.

Child care and other family support measures are good and needed in the Japanese economy, but until the basic structure of work changes, the current birth rate is not going to increase.

For example, more working women need to feel they can move past the clerical level in companies and into management levels, and that doesn't seem to be happening anytime soon.

The Northern European countries, and many European countries are good examples of society support, but Japan needs to get the fundamentals correct such more women in management positions, more women in the upper levels of government.

You can talk all you want about trying to balance the budget but its not going to happen anytime soon as an increase in defense spending and the extra budget related to a tax cut for the public along with a subsidy for lower-income groups will increase the current debt situation.

There is always concern with the Japanese debt situation, as its the highest among developed countries, but most of the debt, if not all, is owned by those in Japan, as compared to 2010 in the Greece situation, where most of the debt was external or owned by those not in Greece.

The Japanese economy is a very stable economy, and in the near term, is not going to go bankrupt as most of the crediting agencies continue to give the Japanese government high ratings.

The challenge, as always it the future and especially for those on social security or pensions, as to whether the Japanese government will need to reduce pensions like Greece did in 2010 to reduce its debt.

Even though the US key rate and the Japanese key rate are far apart, that might change soon as the US has indicated it will reduce its key rate a few times in 2024, which will lower the difference between the US and Japanese key rate.

The weak yen has definitely decreased Japan's economic power, and it might not change too much anytime soon, other than maybe a shift between the US rate and the Japanese key rate.

The Bank of Japan might not change much, if anything in 2024, as future article after this article suggests that the Japanese economy has entered into another recession with two quarters of a textbook style recession.

As are result, the Bank of Japan, again, most likely is going to keep its current policy unchanged until it can see some real positive changes in the Japanese economy such significant wages increases, an increase in consumer demand and a significant increase consumer spending. 

Have a nice day and be safe!