Government spokesperson Minoru Kihara said the budget is intended to shield the economy from risks associated with continued uncertainty in the region and to help authorities respond quickly to fluctuations in energy and commodity prices.
"The government will closely monitor price trends and take necessary measures to ensure that economic activity and daily life are not significantly disrupted," Kihara said.
Prime Minister Takaichi has previously stated that the funding will be used to offset the impact of higher fuel, electricity and gas prices on households across the country.
Japan, which relies heavily on imported energy, has been particularly vulnerable to disruptions in global energy markets. Rising oil prices and supply concerns have contributed to inflationary pressures, increasing costs for both consumers and businesses.
The effects of supply chain disruptions are already being felt in some sectors. In May, major snack manufacturer Calbee announced packaging changes for 14 products, with local media attributing the move in part to shortages of printing ink linked to disruptions in international supply chains.
The government also sought to reassure markets over energy security. Takaichi said Japan expects to maintain stable oil supplies through next spring, adding that imports of naphtha from regions outside the Middle East have recovered to more than 80% of pre-conflict levels.
Meanwhile, the Bank of Japan has revised its economic outlook in response to higher energy costs. In April, the central bank raised its inflation forecasts while lowering growth projections, citing the impact of rising global oil prices.
Economists warn that prolonged instability in the Middle East could place further pressure on inflation and slow economic growth in Japan and other energy-importing nations.
The supplementary budget is part of Tokyo s broader effort to cushion the economy from external shocks and maintain consumer confidence amid an increasingly uncertain global environment.
