Japan’s parliament has passed a massive 102,658 billion yen government fiscal 2002 budget as part of the country’s effort of mitigating economic turmoil triggered by coronavirus pandemic. Approval of the trillion-dollar budget comes at a time when the economy is staring at a major recession as the COVID-19 epidemic continues to fuel shutdowns of various sector of the economy. Similarly, parliament has approved a new string of tax reform legislation that seeks to support startup investments struggling amidst the current economic turmoil.
The approval comes just days after the country’s economy minister Yasutoshi Nishimura warned that the economy was under immense pressure triggering souring income and household conditions. Japan’s job market, which was initially a bright spot in the weakening economy, appears to be struggling, given the shutdowns triggered by the COVID-19 pandemic.
A good number of the country’s industries are no longer operating at full capacity, with some in total shutdown as part of an effort of averting the further spread of the coronavirus. Job offers have similarly plunged to all-time lows, leading to dire income conditions. The passing of the trillion-dollar budget leaves the government well positioned to finance a string of stimulus package aimed at protecting the economy from the impact of the coronavirus pandemic
However, it is not the only country reeling from the effects of the COVID-19 epidemic. The U.S, which has reported a record number of coronavirus infections with the death toll also rising, has also reported a record number of claims for unemployment benefits at 3.3 million.
The market reacted positively to the passing of the trillion-dollar fiscal budget with Japanese stocks rallying after weeks on the receiving end. The country’s major stock index rallied by 4% to close at 19,389 as investors.
Japanese Yen, which has been on the receiving end amidst strength on the Greenback, also gained substantially. Amidst strength in the Japanese Yen, the USD/JPY pair has tumbled from the 109.50 level to current levels of 108.4983. Further strength in the Yen and weakness in the U.S Dollar could see the pair tumbling further with the next stop being the 107.90 level, the next substantial support level.