Japan's cabinet has approved a ¥21.3 trillion economic stimulus package to boost the economy, raising concerns over fiscal sustainability.

Japan's cabinet approved a significant ¥21.3 trillion ($135.40 billion) economic stimulus package on November 21, 2025. This marks the first major policy initiative under Prime Minister Sanae Takaichi, who aims to implement expansionary fiscal measures. The package includes ¥17.7 trillion in general account outlays and ¥2.7 trillion in tax cuts, surpassing last year's ¥13.9 trillion. However, concerns about Japan's worsening fiscal position have led to a decline in the yen and record-high government bond yields. Takaichi stated that funding will come from higher-than-expected tax revenues and non-tax income, with any shortfall covered by issuing additional government bonds. The final amount of bond issuance is still being determined but is expected to exceed last year's ¥6.69 trillion. A supplementary budget to fund the package is anticipated to be approved by November 28, with parliamentary approval sought by year-end.