Japan Unveils $19 Billion Extra Budget to Cushion Mideast Impact

Japan’s cabinet approved a $19.4 billion extra budget to fund measures meant to cushion households from inflation tied to Middle East turbulence, putting fiscal policy back in the spotlight for bond investors.

Prime Minister Sanae Takaichi’s cabinet endorsed a ¥3.1 trillion ($19.4 billion) package that includes a newly created ¥2.5 trillion reserve fund to respond to rising prices for commodities by providing subsidies. The government has yet to specify the usage of that fund, but it is expected to be used initially to cap costs for gasoline.

In a move likely aimed at reassuring market participants over Japan’s finances, ...