Japan’s cabinet approved an annual budget of 107.6 trillion yen for the fiscal year that starts in April 2022 is Japan’s biggest initial spending plan, underscoring a priority of reviving the pandemic-hit economy over returning to long-term fiscal health. Prime Minister Fumio Kishida’s first budget, which parliament must approve by the end of the current fiscal year in March, comes days after the body approved 36 trillion yen of record extra stimulus spending to aid the COVID-19 recovery.
Bigger spending meant fiscal discipline was loosening among Japanese policymakers who are counting on the Bank of Japan’s ultra-loose monetary policy to keep borrowing costs low. This is a negative signal for the Japanese yen.
Origin: FreshForex
