The package is to include, among other things, energy and fuel subsidies, as well as a payment of 30,000 Japanese yen, equivalent to approximately 2,000 Swedish kronor, to low-income earners. The ruling party LDP and Prime Minister Shigeru Ishiba achieved only a couple of weeks ago the weakest election result in 15 years and lost the majority in the parliament's lower house.
Ishiba is still sitting as Prime Minister in the minority government, but to get the stimulus package through, they have met the opposition party DPP halfway on the issue of income tax.
The stimulus package, however, raises questions about how it will affect the country's large budget deficit. Moreover, the latest inflation figures have shown that Japan continues to exceed the central bank's inflation target of 2 percent, and further additions to households could, in theory, drive up inflation even more.
