By Takaya Yamaguchi
TOKYO -Japan’s government will raise the cap for gasoline subsidies and replenish state reserves by compiling an extra budget to cushion the economic blow from rising raw material costs, a draft of its planned relief package obtained by Reuters showed on Friday.
The package will incorporate most of the spending proposals made by the ruling coalition on Thursday, such as cash payments to low-income households with children, the draft showed.
The government will also pledged to compile another “comprehensive” package of measures to support the economy after laying out an annual outline of its long-term economic and fiscal policy in June, according to the draft.
“The government must be vigilant to the impact recent yen falls could have on households and importers,” said the draft of the package, which Prime Minister Fumio Kishida’s administration is expected to announce next week.
Kishida is under pressure to ramp up fiscal spending to ease the pain on households and retailers from rising fuel and raw material costs, driven by the crisis in Ukraine and aggravated by the inflationary effect of recent yen declines.
(Reporting by Takaya Yamaguchi; Writing by Leika Kihara;Editing by Chang-Ran Kim and Gerry Doyle)
