Japan Considers Cash Handouts of ¥30,000–¥50,000 to All Residents to Combat Inflation and US Tariffs Amid Economic Strain

Japan Floats Cash Handouts As Inflation And US Tariffs Bite Into Household Budgets

Japan’s ruling coalition is weighing up the idea of distributing cash to residents in a bid to ease economic pressure from soaring prices and newly imposed US tariffs.

Lawmakers from the Liberal Democratic Party (LDP) and its junior partner Komeito began discussions this week, suggesting that each person could receive between ¥30,000 and ¥50,000.

This is equivalent to around $200–$350 based on current exchange rates.

Growing Pressure Forces Leaders To Consider Direct Payouts

The proposal emerged after Chief Cabinet Secretary Yoshimasa Hayashi asked LDP policy chief Itsunori Onodera to explore ways to support the economy.

The idea, according to sources familiar with internal talks, is part of a wider response to growing financial stress caused by ongoing inflation and a fresh wave of tariffs from the United States.

A senior government official reportedly admitted the move is being considered ahead of this summer’s upper house election, stating,

“We can’t do nothing.”

However, not all within the ruling bloc are on board.

Some lawmakers have raised concerns about how the scheme would be funded and who would qualify for it.

Residents Struggling With Basic Costs Amid Weak Yen

The Japanese public is facing persistent cost-push inflation, fuelled by rising import prices and a weakening yen.

Food prices, especially for essentials like rice, have surged following a poor harvest, adding to the squeeze on household finances.

According to a recent survey across 30 countries, Japan ranked lowest in life satisfaction, with 64% of respondents citing their economic situation as the main reason for their dissatisfaction.

Translated image

Translation:

The number one reason Japanese people don't feel happy is "economic situation"

The number one factor that makes Japanese people feel happy is "relationships with family (41%)," while the number one factor that makes them feel unhappy is "financial situation (64%)."

Furthermore, the percentage of Japanese who answered "my current quality of life is very high" and "I think my overall quality of life will be better in five years" was the lowest among the 30 countries.

Coalition Debate Over Handout Versus Tax Cuts

Komeito has suggested tax cuts might be a better long-term measure, with direct cash payments viewed as a short-term fix.

Some in the party have also floated the idea of increasing the payout to ¥100,000 per person.

There is currently no plan to set income limits, meaning the payments could be distributed widely — though such a move would require several trillion yen and likely necessitate a supplementary budget.

LDP Secretary General Hiroshi Moriyama visited Prime Minister Shigeru Ishiba earlier this week to push for the handout.

Prime Minister Shigeru Ishiba (centre) attends a cabinet meeting on the morning of 8 April 2025, alongside Internal Affairs Minister Seiichiro Murakami (left) and Defence Minister Gen Nakatani.

The idea was also raised in the Diet during talks between Onodera and Komeito’s Mitsunari Okamoto.

Tariffs Add Fuel To Japan’s Economic Concerns

The move follows the United States’ decision to impose a 24% tariff on Japanese goods, with an additional 25% levy on car imports.

Although the measures are currently under a 90-day pause, they have stirred anxiety in Tokyo over Japan’s export-reliant economy.

Hayashi told reporters on Thursday,

“We have conveyed our concern and strongly asked (the United States) to review the tariff measures at various levels.”

Prime Minister Ishiba has described the tariffs as “regrettable” but has continued to pledge substantial financial and defence support for the United States.

This includes a vow to inject one trillion yen into US initiatives and increase Japan’s defence spending, fuelling criticism from some domestic voices who question the government’s spending priorities.

Government Faces Tough Decision Ahead Of Summer Election

The handout discussion comes at a politically sensitive time.

With an upper house election looming and economic sentiment declining, the ruling camp is under pressure to act.

While some officials remain wary of the costs and logistical complexity, talks on a supplementary fiscal 2025 budget are now underway.

Onodera said,

“We must figure out what has been most affected (first). For now, we don’t need to say, ‘We can do it’ or ‘We cannot.’”

The party is still weighing its options.

Whether the handouts go ahead may depend on shifting public sentiment and the ruling party’s ability to secure backing from a divided parliament.

Japan Moves Toward Stricter Crypto Oversight Amid Growing Investor Interest

Japan is also home to a steadily growing crypto market, with around 11.8 million accounts reported by the end of 2024—an increase of three million in just a year.

While cryptocurrencies were first recognised in Japan as a form of payment in 2016, they have since evolved into a popular investment option, prompting regulators to rethink their approach.

By 2026, the Financial Services Agency (FSA) plans to reclassify crypto assets as financial products under the Financial Instruments and Exchange Act.

This move will place cryptocurrencies under the same regulatory framework as stocks and bonds, bringing them in line with insider trading rules and other financial market safeguards.

The change is part of Japan’s broader effort to balance investor protection with innovation, and could pave the way for crypto ETFs, lower tax rates, and greater institutional participation—though it may also limit retail investor access to some platforms.

As Japan considers handing out cash to ease short-term economic pain, the government's parallel push to regulate crypto more tightly hints at a longer-term shift toward a more structured, cashless economy – one where digital assets could play a growing role in both policy and personal finance.