Yen Firms Modestly as Japan Unveils ¥21.3T Fiscal Stimulus
The Japanese yen picked up modest support in foreign exchange trading after the Cabinet approved a ¥21.3 trillion economic stimulus package. The move, aimed at bolstering growth and easing cost-of-living pressures, nudged USD/JPY slightly lower following a largely quiet session for currency markets.
According to the plan, ¥17.7 trillion will be deployed as fresh spending through an extra budget, with measures spanning price relief and targeted investment in priority sectors. The largest share—about ¥11.7 trillion—will focus on easing household and business costs via subsidies, cash handouts, and related support. This package marks the most substantial round of supplementary spending since the pandemic, underscoring the government’s intent to stabilize the economy and curb inflationary strain.
Earlier rounds of verbal intervention from officials had limited impact on the yen itself, though they appeared to trim Japanese government bond yields at the margins. Following the Cabinet decision, the yen finally saw incremental bids, with USD/JPY and yen crosses easing slightly as traders weighed the near-term implications for fiscal support and market sentiment.
Key Points – Japan’s Cabinet approved a ¥21.3 trillion fiscal stimulus package. – ¥17.7 trillion will be fresh spending via an extra budget. – Around ¥11.7 trillion targets price relief through subsidies and cash handouts. – USD/JPY dipped modestly as the yen found limited support. – Earlier verbal intervention had little currency impact but nudged JGB yields lower. – This is the largest supplementary spending since the pandemic.
