Marketplace Morning Report Japan borrows heavily to stimulate its economy
Nov 21, 2025
Davina Gupta, a BBC correspondent, sheds light on Japan's newly approved stimulus package worth over $130 billion, aimed at easing energy costs and supporting households. She dives into the potential diplomatic tensions arising from Prime Minister Takaichi's comments on Taiwan and their impacts on China-Japan relations. Meanwhile, Esme Stallard provides insights from COP30 in Brazil, revealing the ongoing struggle to reach a consensus on fossil fuel phase-out, leaving many climate delegates disappointed.
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Stimulus Targets Household Costs
- Japan's stimulus prioritizes household relief like energy subsidies and child cash handouts.
- The package aims to ease daily costs amid persistent inflation above the BOJ's 2% target.
Defense Spending Accelerated
- The package accelerates defence spending to 2% of GDP two years early.
- Fiscal policy is being used partly to respond to diplomatic pressure from China.
Debt Raises Market And Currency Risks
- Markets worry where the stimulus funding will come from given Japan's high debt.
- Rising bond yields and a weak yen risk making imports and everyday goods more expensive.