By Yoshifumi Takemoto and Kantaro Komiya
TOKYO (Reuters) Japanese Prime Minister Fumio Kishida on Monday instructed his ministers to draft additional steps to cushion the economic blow from rising living costs in a package because of be compiled the following month.
Within the measures, Kishida said he’s got ordered the federal government to carry off on raising the cost of imported wheat it sells to retailers in October a move that could essentially subsidise households to handle surging commodity prices.
In a gathering on steps to combat rising living costs, Kishida also said he’s got instructed the trade ministry to create additional plans to curb rises in fuel and power bills.
Chief cabinet secretary Hirokazu Matsuno said the federal government will try to compile the package of measures early the following month, and tap roughly 4.7 trillion yen ($35 billion) remaining in state reserves to cover the price. The government didn’t release the estimated size of total spending for the package.
Dealing with rising commodity costs has been among top priorities for Kishidas administration, as Japans heavy reliance on imports for energy and food makes its economy susceptible to rising global raw material prices. The Ukraine war has intensified the commodity cost pressures globally.
Wheat is among products that saw prices surge because of the war in Ukraine. In Japan, the federal government manages importing wheat from overseas, and sets at each April and October of the entire year the sales price it charges to retailers.
The purchase price the federal government charged retailers for imported wheat jumped 17.3% in April from October because of rising global commodity prices, resulting in hikes for an array of daily staples including bread and pasta.
If rising global costs are fully reflected, the purchase price the federal government charges retailers could rise an additional 20% in October, Kishida said, adding he’s got instructed the agriculture minister to make sure prices are maintained at current levels beyond October.
($1 = 133.2900 yen)
(Reporting by Yoshifumi Takemoto and Kantaro Komiya, writing by Leika Kihara; Editing by Kim Coghill & Shri Navaratnam)