Public Policy Updates – December 2021

This month’s edition of Policy Radar covers developments in Finance, Technology, Defense and Healthcare.

Month Focus: Japan Readies Record 56t Yen Stimulus Package to Fight COVID Slump

The Japanese government is preparing a record 55.7 trillion yen ($482.6 billion) supplemental budget to counter the economic shock of the COVID-19 pandemic. That surpasses the government’s previous COVID relief package, which amounted to 48.4 trillion yen, and it dwarfs the 15.4-trillion-yen stimulus bill passed in the wake of the 2009 financial crisis.

Japan is still reeling from the economic blow dealt by the pandemic. The economy shrank by 0.8% in the July-September period from the previous quarter, or 3% at an annualized rate. Exports, especially auto shipments, have been hit by the semiconductor shortage, and entry restrictions have effectively eliminated inbound tourism. Demand for services, notably in the hospitality sector and restaurant business, is changing as people’s daily habits adapt to COVID.

The focus of the next budget will be support for households and businesses. The ruling Liberal Democratic Party (LDP) has agreed with coalition partner Komeito to provide compensation worth 100,000 yen to households with children aged 18 or younger. The spending bill will also provide grants of up to 2.5 million yen for businesses.