Japan Prepares ¥17 Trillion Stimulus to Tackle Living Costs and Power AI–Chip Strategy
Japan’s new administration is set to roll out a fiscal package exceeding ¥17 trillion (roughly $110 billion), aiming to cushion households from persistent cost pressures while accelerating investment in artificial intelligence and semiconductors. The plan underscores Prime Minister Sanae Takaichi’s push for swift policy action to revive momentum in the world’s third-largest economy.
According to government briefings, Finance Minister Satsuki Katayama outlined the scale of the initiative after consultations with the prime minister. The package is designed to deliver immediate cost-of-living relief alongside targeted funding for strategic industries, with a focus on AI capabilities and chip manufacturing. These priorities align with Tokyo’s broader effort to strengthen supply-chain resilience and secure long-term competitiveness in digital infrastructure and advanced manufacturing.
Cabinet approval is expected on Friday, paving the way for rapid deployment. In markets, a stimulus of this magnitude could be mildly supportive for Japanese equities and broader risk assets. At the same time, looser fiscal policy may temper near-term yen appreciation as investors weigh growth support against currency dynamics.
Key Points – Japan plans a stimulus package topping ¥17 trillion to support the economy – Measures target cost-of-living relief and strategic investment in AI and semiconductors – Finance Minister Satsuki Katayama signaled the size after talks with Prime Minister Sanae Takaichi – Cabinet sign-off is anticipated on Friday – Policy aims to bolster supply-chain resilience and long-term competitiveness – Market impact: supportive for risk assets; could limit near-term yen strength
