Japan has approved an additional $3.2 billion spending package aimed at e asing rising electricity and gas costs as tensions in the Middle East continue to unsettle global energy markets, according to Kyodo News.
The government approved the emergency subsidy plan Tuesday to support households and small businesses during the summer months, when energy demand typically rises.
The move comes amid growing concerns over a prolonged energy crisis linked to instability around the Strait of Hormuz, a major route for global oil transportation.
Japan, which relies heavily on imported energy supplies from the Middle East, has become increasingly vulnerable to disruptions affecting crude oil and liquefied natural gas shipments.
Rising geopolitical tensions have already pushed fuel prices higher and increased inflationary pressures across Asia, according to analysts.
Under the new measures, Tokyo will allocate 513.5 billion yen from reserve funds to subsidize electricity and gas bills between July and September, Kyodo News reported.
The government estimates that the package could reduce household utility costs by approximately 5,000 yen during the summer period.
Minister of Economy, Trade and Industry Ryosei Akazawa said support would particularly focus on August, when electricity demand generally reaches seasonal highs.
Meanwhile, Prime Minister Sanae Takaichi has proposed a broader supplementary budget worth nearly $19 billion to offset the economic impact of higher fuel costs and inflation, according to Reuters.
Economists have warned that continued instability in the Middle East could place additional strain on Japan’s economy and complicate inflation management and future policy decisions by the Bank of Japan.
