The Japanese cabinet approved an additional budget of around 19 billion dollars to alleviate the impacts of the Middle East situation.

The Japanese Cabinet has approved a supplementary budget of $19.4 billion to fund measures aimed at alleviating the inflationary impact on households caused by the unrest in the Middle East, making fiscal policy once again a focus of bond investors' attention. The Cabinet, led by Prime Minister Sanae Takaichi, approved a plan totaling 3.1 trillion yen, which includes the establishment of a new 2.5 trillion yen reserve fund to subsidize coping with rising commodity prices. Although the government has not specified how the fund will be used, it is expected to be initially used to control gasoline prices. The Cabinet also approved a plan to provide funding for the scheme, which will require new debt financing. Despite the need for additional borrowing, the government will strive to maintain the total amount of bond issuance for the calendar year unchanged, with the plan indicating that some debt authorized in the previous fiscal year's budget will be canceled. The supplementary budget will be submitted to the Diet on Wednesday, with approval expected as early as Friday.