FILE PHOTO: Gasoline fuel guns are pictured in front of fuel boards at a gasoline station in Tokyo, Japan September 20, 2022. REUTERS/Kim Kyung-Hoon
(Reuters) – Japan’s government is considering extending subsidies to curb gasoline prices beyond January next year, Kyodo news agency reported on Wednesday, a move that will likely moderate the pace of inflation in the world’s third-largest economy.
The subsidies will last at least until March next year and could be sustained beyond April depending on discussions between the government and the ruling coalition, Kyodo said without citing sources.
The extension will be part of a package of measures the government will compile by the end of this month to cushion the blow to households and small firms from rising living costs.
The government will fund the measure by compiling a supplementary budget for the current fiscal year ending in March 2024, Kyodo said.
The government is also considering extending the year-end deadline for subsidies to curb utility bills, it said.
The decision on the subsidies may affect the Bank of Japan’s inflation forecasts for next year, which is seen as crucial to the timing of an exit from an ultra-loose monetary policy.
The BOJ will issue fresh quarterly growth and inflation forecasts at its upcoming policy-setting meeting on Oct. 30-31.