Japan plans new package to cushion the blow of rising cost of living

A man looks at a shop in the Ameyoko shopping district in Tokyo, Japan, May 20, 2022. REUTERS/Kim Kyung-Hoon

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  • Prime Minister Kishida instructs cabinet to develop plan next month
  • The government plans to delay the increase in the sale price of imported wheat
  • Additional measures are being considered to reduce fuel and electricity bill

TOKYO, Aug 15 (Reuters) – Japanese Prime Minister Fumio Kishida instructed his ministers on Monday to draw up additional measures to cushion the economic blow from the rising cost of living in a package due to be compiled next month.

As part of the measures, Kishida said he had ordered the government to halt increases in the price of imported wheat it sells to retailers in October – a move that would essentially subsidize households to cope with soaring food shortages. raw material prices.

During a meeting on measures to curb the rising cost of living, Kishida also said he had instructed the Ministry of Commerce to come up with additional plans to curb rising fuel and electricity bills.

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Chief Cabinet Secretary Hirokazu Matsuno said the government would work to compile the package early next month and tap into about 4.7 trillion yen ($35 billion) remaining in the state reserves to cover the cost. The government has not released the estimated total expenditure for the package.

Dealing with rising commodity prices has been a top priority for Kishida’s administration, as Japan’s heavy reliance on energy and food imports leaves its economy vulnerable to rising global commodity prices. raw materials. The war in Ukraine has intensified pressure on global commodity prices.

Wheat is one of the products whose prices have exploded following the war in Ukraine. In Japan, the government is responsible for importing wheat from overseas and sets the selling price it charges to retailers each April and October of the year.

The price the government charged retailers for imported wheat jumped 17.3% in April from October due to higher global commodity prices, driving increases for a wide range of everyday staples , especially bread and pasta.

If rising global costs are fully reflected, the price the government charges retailers could rise another 20% in October, Kishida said, adding that he had instructed the agriculture minister to ensure that prices maintained at current levels beyond October.

($1 = 133.2900 yen)

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Reporting by Yoshifumi Takemoto and Kantaro Komiya, writing by Leika Kihara; Editing by Kim Coghill & Shri Navaratnam

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