Japan cabinet clears $19 billion to cushion energy cost surge from West Asia war

The Japanese cabinet has cleared about $19 billion in additional spending to help households and businesses cope with rising energy costs triggered by the war in West Asia.The extra budget of ¥3.1 trillion ($19.4 billion) is set to be submitted to parliament on Wednesday, June 3.

The package includes subsidies for electricity, gas and fuel bills, as well as support for energy-intensive industries facing higher import costs.
According to Bloomberg, the supplementary budget will be financed through new debt issuance. However, the government said total bond issuance for the fiscal year will remain unchanged, as it plans to offset the additional borrowing by cancelling some debt authorised under the previous fiscal year’s budget.Japan, which relies heavily on imported oil and liquefied natural gas, has seen concerns grow over the economic impact of prolonged instability since the war broke out on February 28.

The move comes as global energy markets remain volatile amid the ongoing war and fears of continued disruptions to crude oil shipping via the Strait of Hormuz.

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