The Japanese government has announced a comprehensive ¥21.3 trillion economic stimulus package aimed at addressing rising living costs and supporting households, with significant implications for foreign residents living in Japan. Prime Minister Takaichi's cabinet, marking its first month in office, has made combating inflation its top priority, according to NHK. The massive stimulus package includes expanded subsidies for electricity and gas bills, which will directly benefit all households, including expat families facing higher utility costs. The government is also providing increased funding to local municipalities through dedicated grants, enabling prefectural and city governments to implement region-specific support measures. The administration is rushing to finalize the supplementary budget that will fund these initiatives, aiming for passage before the end of the year to ensure timely relief for residents. In a significant development for drivers, the House of Representatives Finance Committee unanimously approved amendments to abolish the provisional gasoline tax rate, with implementation set for December 31, 2025, according to NHK reports. This temporary tax surcharge has long increased fuel costs beyond the standard rate. However, the Local Public Finance Council has warned that eliminating this revenue stream could impact local government budgets, recommending that alternative funding sources be secured to maintain infrastructure and public services that foreign residents rely upon. The tax reform discussions extend beyond fuel taxes. The Liberal Democratic Party and the Democratic Party for the People are negotiating changes to the so-called "income wall" thresholds that affect part-time workers. The LDP has proposed indexing the basic income tax deduction to inflation, which could provide relief as living costs rise. These negotiations are particularly relevant for expats working part-time or those with spouses in part-time employment, as changes could affect household tax burdens and take-home pay. In a controversial move that has drawn criticism, the LDP is considering raising Diet members' monthly salaries by ¥50,000, aligning with increases for special national civil servants. The Japan Innovation Party has opposed this measure, according to NHK. This proposal comes as the government asks residents to endure economic pressures, creating a political debate about fiscal priorities. The economic backdrop includes ongoing currency concerns. Finance Minister Katayama stated that market intervention remains "naturally conceivable" as the yen continues weakening against major currencies. He characterized recent yen movements as "extremely one-sided and rapid," signaling the government's readiness to act if currency volatility threatens economic stability. For expats sending money abroad or receiving foreign currency income, these currency dynamics warrant close attention. The Local Public Finance Council's concerns about revenue replacement highlight the complex trade-offs involved in tax cuts. While lower fuel taxes benefit consumers immediately, municipalities must maintain roads, public transportation, and other infrastructure. The council emphasized that stable alternative revenue sources must be identified to prevent service deterioration in communities where foreign residents live and work. For expats in Japan, these policy measures represent both opportunities and uncertainties. Lower utility bills and reduced fuel costs will ease monthly expenses, while potential income tax reforms could affect household finances depending on employment arrangements. However, the timing and final details of many measures remain subject to parliamentary approval and inter-party negotiations. The government's emphasis on swift implementation suggests that some relief measures could take effect early in 2026, provided the supplementary budget passes as scheduled. Foreign residents should monitor their utility bills for subsidy applications and stay informed about tax threshold changes that may require adjusting withholding arrangements with employers. As Japan navigates economic headwinds, these policy responses aim to cushion the impact on all residents, including the expatriate community.