Japan's new PM looks to spur recovery with $316 billion spending package

Prime Minister Fumio Kishida's first extra budget includes $316 billion in new spending to fund the country's largest ever fiscal package.

The prime minister's cabinet approved the 36 trillion yen spending package along with government bonds worth 22 trillion yen to fund the plan, according to Bloomberg.

Over a trillion yen will be used as cash payments to households with children, and several trillion yen will provide aid to restaurants and businesses that have been hard hit by the pandemic, Bloomberg added.

This spending comes as Japan has seemingly brought COVID-19 under control, causing some to question why the country would dish out so much money now. Many pandemic-related restrictions have been lifted, vaccination rates were over 75 percent and the county's economy had been expected to recover on its own, Bloomberg noted.

"We took the action that was needed," Finance Minister Shunichi Suzuki said, per Bloomberg, as the new borrowing will increase the country's debt. "But it does make Japan's financial situation more challenging."

Last week, Kishida announced a record-breaking fiscal package of 56 trillion yen, or $490 billion.

Kishida was elected in October to replace Yoshihide Suga, who announced he was stepping down in September.

The prime minister and his Liberal Democratic Party will look to further cement their power in elections next year.