Takaichi’s Cabinet Greenlights Massive ¥112 Trillion Fiscal Package - What It Means for Digital Assets

Japan just dropped a fiscal bomb—and crypto markets are watching the fallout.

Government Opens the Spending Floodgates

Takaichi's cabinet didn't just approve a budget; they unleashed a ¥112 trillion tidal wave of government spending. That's trillion with a 'T'—a number so large it makes most central bank balance sheets look like pocket change. This isn't just stimulus; it's economic shock therapy on a national scale.

Digital Gold in a Fiat Deluge

When traditional finance gets this inflationary, smart money starts looking for exits. Every yen printed dilutes existing holdings—basic monetary physics. Meanwhile, Bitcoin's fixed supply starts looking less like a tech quirk and more like financial wisdom carved in cryptographic stone. The contrast couldn't be sharper: unlimited fiat versus algorithmically scarce digital assets.

Institutional Calculus Shifts

Japanese institutions have been dipping toes in crypto waters for years. With this package, they might just dive in headfirst. When your government demonstrates such... enthusiasm for currency creation, diversifying into non-sovereign assets stops being speculative and starts being prudent. The carry trade gets old when your currency's purchasing power takes a vacation.

Regulatory Winds Changing?

Massive spending requires massive economic activity—and innovation drives growth better than anything. Japan's FSA has been cautiously progressive on crypto regulation. Watch for that caution to evolve into genuine encouragement as Tokyo seeks growth engines that don't require printing more of those ¥112 trillion.

The Bottom Line: Math Doesn't Lie

Here's the cynical finance jab: governments measure success in GDP growth percentages while quietly erasing your savings through inflation they refuse to call inflation. Meanwhile, blockchain networks just keep settling transactions and enforcing contracts—no cabinet approval required. The old system creates money from nothing; the new system creates value from mathematics. Choose your side wisely.

Takaichi’s cabinet approves ¥112 trillion fiscal package

Takaichi’s fiscal package, unveiled in November, includes ¥18 trillion, or about $115 billion, in additional stimulus focused on 17 government-backed sectors, such as nuclear fusion and quantum computing.

On top of the stimulus, the government approved a record ¥112 trillion ($785 billion) budget for the next fiscal year. While that’s expected to help hold up consumer spending, it also increases the strain on the country’s massive public debt.

But the focus in the markets is on the cash hitting the real economy. Japan’s policymakers are using this funding to try and take the lead in technologies that are still up for grabs globally.

Inflation numbers coming out of Tokyo are giving the BOJ more cover to tighten policy.

The Core consumer price index, which excludes fresh food, rose 2.3% in December. That’s down from 2.8% in November and also lower than economists expected.

A second inflation gauge, the one the BOJ tracks most closely, removing both fuel and food, showed a 2.6% increase in December. That also eased from the prior month.

The BOJ’s next policy meeting is scheduled for January 22–23, where members will update their growth and inflation projections. Just last week, the bank raised its main interest rate to 0.75%, the highest in 30 years.

Ueda Kazuo, the bank’s governor, told reporters on Thursday that they are seeing “steady progress” in trying to meet the 2% inflation goal, with wage growth now backing that effort. “We’re making steady progress in durably achieving our price target,” Ueda said.

Weaker yen benefits exporters while risks build at the edge

The yen is finishing 2025 much weaker than predicted, giving a big lift to exporters like car companies and commodity traders. As of December 25, the yen has only climbed less than 1% against the dollar year-to-date.

This is giving companies that sell abroad higher profits when their dollars come back home. Naoya Oshikubo, senior economist at Mitsubishi UFJ Trust, said the yen is likely to stay around the 150–160 range in 2026. “The BOJ’s hikes don’t really impact the yen, as the market has already priced in two hikes a year,” he said.

That view has been widely echoed among large-cap investors, who expect export-heavy sectors to keep beating the broader market next year. But not everyone is optimistic. Rie Nishihara, a strategist at JPMorgan, warned that if the yen slips too far, the boost turns into a threat. “Excessive yen depreciation” could hurt real income growth, she said, adding that 165 per dollar is the red line where it starts causing damage.

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