Japan Passes $250 Billion Stimulus Package

Japan on Friday approved a $250 billion stimulus package to help low-income families and to boost wages and economic growth, according to reports.

The plan was approved by the Cabinet after Prime Minister Shigeru Ishiba's ruling Liberal Democratic Party lost its majority in October's elections, RTE reported.

It also includes fuel and energy subsidies, aid to small businesses, and support for digital innovation, the Associated Press reported.

"To enhance the vitality of Japan as a whole, we will strengthen the growth of the national and regional economies and raise wages for all people, of all generations," said government spokesman Yoshimasa Hayashi, according to RTE.

To gain the support of lawmakers, the plan proposed raising the annual tax-free threshold from the existing $6,640, the Associated Press reported. It's unclear what new ceiling will be proposed.

The government said there are encouraging signs of growth but the country must not allow prices to fall as they did during an earlier period of deflation.

"During the past 30 years, our nation has overcome various challenges, including deflation and confusion that followed the burst of the 'bubble economy,' the global financial crisis, various natural disasters and the difficulties stemming from the coronavirus pandemic," according to documents provided by the Ministry of Economy, Trade and Industry, the Associated Press reported.

Japan's core inflation rate was 2.3% in October, down from 2.4% in September and 2.8% in August.

The current rate is lower than the country's long-term average and there are fears that if more money is not introduced into the economy, it could start a downward spiral for prices.