Prime Minister Fumio Kishida is facing pressure to increase spending, even as bond yields reach a nine-year high and earlier political promises test his ability to secure further funding for the world’s most indebted developed economy.
Kishida pivoted away from his previous stance Tuesday by scrapping September-end plans to stop subsidies that cap gasoline prices. He also pledged to consider fresh economic measures to help households and businesses deal with inflation next month.
His low approval ratings and Japan’s tendency to put together an extra budget at the end of every year are likely at least partly behind the move. But Kishida’s latest bid to spend more also comes just as economists upgrade their views for annual growth this year, calling into question the necessity of additional stimulus.