Economy
Japan approves $135B stimulus package to help revive sluggish economy
Japan’s Cabinet approved a 21.3 trillion yen ($135.4 billion) stimulus package Friday to help spur the economy through expansionary government spending and to relieve the impact of higher prices.
After taking office last month, Prime Minister Sanae Takaichi promised to boost government spending despite concerns that such moves will delay progress on trimming Japan’s national debt, which is about triple the size of its economy.
Takaichi told reporters that the package aims to quickly deliver on her promises.
“Through wise spending, we will change worries into hope and achieve a strong economy,” she said.
“What we should do now is to strengthen the national power through expansionary spending, through wise spending, and not to cause harm through excessively contractionary policies,” she said.
The spending package far exceeds those of the pre-COVID-19 pandemic years and is also meant partly to blunt the impact of higher U.S. tariffs on Japanese exports to America under President Donald Trump.
Exports to the U.S. fell in October for the seventh straight month, the government said Friday, though shipments to the rest of the world rose 3.7%, thanks partly to higher exports to the rest of Asia.
In recent days, investors have sold off Japanese government bonds, pushing yields higher, while the yen has fallen to nearly its lowest level this year.
Share prices have also taken a hit from renewed friction with China after Takaichi made comments that angered Beijing, provoking retaliatory moves including an advisory warning Chinese tourists and students against going to Japan.
The benchmark Nikkei 225 index fell 2.4% on Friday, mainly due to heavy selling of technology shares.
The lavish spending package approved Friday includes subsidies for energy costs, a cut in the gasoline tax and other measures to help consumers struggling with the rising cost of living. The government reported Friday that core inflation excluding volatile food costs was 3% in October, higher than the central bank’s target of around 2%.
Specific subsidies include one-time cash handouts of 20,000 yen (about $130) per child, which would require about 400 billion yen in government funding and issuing rice vouchers or other coupons worth 3,000 yen per person, to be distributed by local authorities.
Takaichi’s government must compile a supplementary budget and gain approval by the parliament by the end of this year to fund the package. That’s a major challenge for her ruling coalition, which lacks a majority in both the Upper and Lower houses of the Diet.
Takaichi succeeded former Prime Minister Shigeru Ishiba, who was virtually ousted by his rivals in the ruling party after losing major elections due to voter dissatisfaction over his minority government’s slow response to soaring prices and lagging wages.
As Japan’s first female prime minister, Takaichi has so far enjoyed high levels of public support largely because of expectations she might shake up Japan’s gerontocratic politics. But since she has a minority government, she needs cooperation with opposition parties to get her supplementary budget and spending package passed.
Opposition lawmakers and experts have questioned whether the package will be effective in attaining its aims. One of which is to slightly lower consumer prices by cutting energy costs. Any impact on inflation is expected to be transient since increased demand from other stimulus would tend to push prices higher.
The package also is meant to raise Japan’s gross domestic product (GDP) by 24 trillion yen, or an annualized rate of 1.4%, according to the Cabinet Office.
Japan’s economy, the world’s fourth largest, contracted at a 1.8% annual pace in the July-September period.
The U.S. national debt has surged past $40 trillion for the first time, more than doubling in less than a decade as Washington’s mounting fiscal burden reaches another historic milestone, Treasury Department data showed.
Total public debt outstanding reached $40.047 trillion on Tuesday, rising from $39.987 trillion a day earlier, the Treasury’s Debt to the Penny dataset showed.
The total comprises $32.266 trillion in debt held by the public and $7.782 trillion in intragovernmental holdings.
The federal debt stood at approximately $19.95 trillion when President Donald Trump first took office in January 2017 and reached $27.75 trillion by the end of his first term.
It then climbed to roughly $36.22 trillion during former President Joe Biden’s four-year presidency before increasing by another $3.8 trillion since Trump returned to office.
Debt increased by approximately $11.6 trillion across Trump’s two terms and by about $8.5 trillion under Biden.
Persistent budget deficits, pandemic-related borrowing, tax cuts, growing social program expenditures and rising interest costs have contributed to the increase.
The milestone is expected to heighten concerns about U.S. fiscal sustainability as debt-servicing costs take up a growing share of federal revenues.
Kenya and Türkiye are seeking to strengthen their ties beyond the long-standing diplomatic relationship, targeting greater cooperation in trade, investment, aviation, defense and regional security, according to Kenya’s Foreign Ministry on Wednesday.
The discussions took place in Nairobi between Kenya’s Prime Cabinet Secretary and Foreign Minister Musalia Mudavadi and a visiting delegation from the Türkiye-Kenya Parliamentary Friendship Group.
“Stronger global partnerships should open doors for Kenyan businesses, create jobs and connect our people to bigger markets,” Mudavadi said after the meeting.
According to the ministry, Nairobi is seeking increased Turkish investment and greater bilateral trade, particularly in manufacturing, tourism and aviation, as Kenya looks to diversify its international economic partnerships and strengthen its position as a commercial gateway to East Africa.
The two sides also discussed closer cooperation between Kenya Airways and Turkish Airlines, with improved air links expected to facilitate tourism, investment and business travel between the two countries.
The Turkish delegation was led by Ismail Güneş, a lawmaker in the Parliament from the Uşak province and also co-chair of the Türkiye-Kenya Parliamentary Friendship Group.
Kenya’s delegation was led by lawmaker Adan Keynan Wehliye, chair of the Kenya-Türkiye Parliamentary Friendship Group.
Security cooperation featured prominently in the talks, with Türkiye offering to share its experience in counterterrorism and the development of a domestic defense industry.
The discussions also covered security in the Horn of Africa, where both countries have significant interests and have been involved in efforts to support stability in Somalia.
Türkiye has developed extensive political, military and economic ties with Somalia and operates a major military training facility in Mogadishu.
Kenya, which shares a long border with Somalia, has for years faced attacks by the al-Shabaab terrorist group and remains involved in regional efforts to combat it.
The Turkish delegation pointed to a defense industry agreement signed between Kenya and Türkiye in 2023 and a separate defense cooperation agreement concluded in May this year.
Both sides expressed hope that the agreements would advance through their respective legislative processes and provide a broader framework for security cooperation.
Mudavadi welcomed Türkiye’s role in international peace and security and encouraged Ankara to continue diplomatic and mediation efforts aimed at resolving conflicts.
He said wars and geopolitical tensions increasingly have consequences beyond the countries directly involved, including disruptions to global supply chains that affect African economies.
Health was also identified as an area for expanded cooperation, with Türkiye expressing readiness to work with Kenya on hospital infrastructure, medical training, health technology, specialized medical services and health system management.
Ankara has significantly expanded its diplomatic presence across Africa over the past two decades. Güneş said Türkiye now operates 44 embassies on the continent, compared with 12 previously, reflecting Ankara’s push for closer political and economic engagement with African countries.
Kenya and Türkiye have maintained diplomatic relations for decades, with cooperation expanding into infrastructure, trade, security and development.
Nairobi views Türkiye as an increasingly important economic partner as it seeks new investment and export markets, while Kenya offers Ankara access to one of East Africa’s largest economies and the wider regional market.
The Foreign Ministry said the latest talks were aimed at translating political goodwill into practical economic and strategic cooperation, including stronger commercial ties and closer coordination on regional security.
The Emirati decision to halt all financial and economic transactions with Iran until further notice, citing a military escalation by Tehran with a missile threat, has brought back to the spotlight the fraught ties between the major Gulf Arab oil producer and Iran.
The United Arab Emirates (UAE), a close U.S. ally and regional power, was the Gulf state most heavily hit by Tehran during the early stages of the Middle East war.
However, the last reported attack on UAE soil was the May 4 strike on Fujairah port, a key oil export hub.
The move by the UAE to sever commercial ties came after its defense ministry said that it had detected two ballistic missiles launched from Iran, an incident that marked the first time in months that residents received telephone alerts warning of possible threats.
In a statement, the ministry said the missiles targeted “maritime traffic” based on its assessments. Both missiles fell into the sea, it said.
The UAE also sent a phone alert on Tuesday to residents stating that the situation was safe and people should resume normal activities after the earlier warning.
Iran’s Foreign Ministry rejected the statement by the UAE that its missiles targeted maritime traffic, describing it as “baseless.”
UAE says it is committed to dialogue
Dubai, the UAE’s main commercial hub, is one of Tehran’s most critical economic lifelines.
UAE official Afra al-Hameli, Director of the Strategic Communications Department at the Ministry of Foreign Affairs, said the UAE was committed to dialogue and cooperation to advance peace, stability, and prosperity in the region.
He said that in light of regional escalations that undermine regional and international peace and security, all trade, commercial exchanges, and financial transactions with Iran have been halted.
Anwar Gargash, diplomatic advisor to the UAE president, said in a post on X that rumors about the “provision of financial facilities to Iran” are “false and part of desperate media campaigns.”
The UAE was drawn into the wider war in the region, which began in February with U.S.-Israeli strikes on Iran.
Tehran’s attacks on UAE soil stopped in May, while they persisted in neighboring Kuwait and Bahrain. Attacks at sea on its vessels did not stop.
In August, Abu Dhabi National Oil Company (ADNOC), one of the world’s largest energy producers, said it was being significantly impacted by what it described as unprovoked attacks on its people and assets, as it sought to continue meeting customer requirements in an “exceptionally challenging environment.”
ADNOC said in a statement that several of its vessels had been attacked by missiles and drones while transiting the Strait of Hormuz since the start of the conflict.
The missile launch that the UAE blamed on Iran came as a 60-day window for U.S.-Iranian peace talks expired without a breakthrough, raising fears of a new escalation in the conflict that has disrupted shipping through the Strait of Hormuz since February and rattled global markets.
Iran has not claimed responsibility for the attacks on ADNOC vessels.
Iran’s Revolutionary Guards have previously threatened action against vessels transiting the strait if they are linked to Tehran’s adversaries or fail to comply with Iranian directives.
A sharp rise in gasoline prices is forcing Americans to rethink their daily transportation habits, with many driving less, combining trips and searching for cheaper fuel, according to a recent survey.
About 81% of respondents said they had made at least one change to their daily routine because of higher transportation costs, the LendingTree Auto Transportation Costs Survey showed.
Donald Trump on Saturday warned Americans to prepare for continued high fuel prices as a result of the Iran war, an uncomfortable admission for a president who campaigned on lowering energy prices.
Persistently high pump prices above $4.00 a gallon are a risk for Trump’s Republican Party, which will be campaigning to retain narrow majorities in both houses of Congress during November’s midterm elections.
The average U.S. price for regular gasoline is more than $4.06 a gallon, according to motorist group AAA, up more than $1 per gallon from a year ago, or nearly 30% higher.
1 in 5 Americans driving less
The most direct impact of higher gasoline prices is showing up in vehicle use.
About 20% of survey respondents said they were driving less than they did a year ago. Among those consumers, 64% said high gasoline prices were one of the main reasons for reducing their driving.
At the same time, not all Americans are cutting back. 34% said they were driving more than a year ago, with the share particularly high among younger consumers and families with children.
Among Gen Z respondents, 56% said they were driving more than they did a year earlier. The figure rose to 52% among parents with children under 18.
The figures suggest that higher gasoline prices are changing transportation behavior without eliminating the need to travel. Consumers who rely on cars for work, school and family responsibilities may continue driving despite higher costs.
Combining trips
Rising fuel costs are also prompting consumers to rethink how they organize their journeys.
Thirty-eight percent of respondents said they were trying to accomplish daily errands in fewer trips, combining activities such as shopping, work and school into single journeys.
Another 31% said they had generally reduced their vehicle use.
This suggests that prices are affecting not only how much fuel consumers purchase but also how they plan their time and transportation.
Shopping around for cheaper gas
Price comparison is also becoming more common.
Twenty-eight percent of respondents said they had started looking for cheaper gas stations before filling up.
Some consumers have also abandoned certain trips, while others have postponed vehicle purchases or maintenance.
Such changes indicate that higher fuel costs can put indirect pressure on other areas of household spending as consumers adjust their budgets.
Transportation costs top $1,000 a month for some
The increase in gasoline prices is contributing to higher overall transportation expenses.
Ten percent of respondents said they spend $1,000 or more per month on transportation.
Meanwhile, 30% reported monthly transportation expenses of less than $100, 26% spent between $100 and $249, 20% between $250 and $499, and 14% between $500 and $999.
The figures highlight the potentially significant impact of higher fuel costs on households that depend heavily on cars.
Carpooling gains traction
The survey also points to changes in vehicle-sharing habits.
About 68% of respondents said they regularly drive or have access to a vehicle, while 29% said they carpool roughly once a week.
Carpooling was particularly common among Gen Z respondents.
If fuel prices remain elevated, greater use of shared transportation could become a more lasting shift as consumers look for ways to reduce the cost of car ownership and travel.
Shares in pharma giant Moderna soared about 60% in premarket trading after the company, in a joint statement with Merck, said its mRNA vaccine, combined with Merck’s immunotherapy Keytruda, succeeded in a late-stage trial for skin cancer, also known as melanoma.
The study is ongoing, but interim results found the treatment, Intismeran, met both its primary target of reducing cancer recurrence and its secondary goal of keeping cancers from spreading to other parts of the body.
Moderna has been diversifying its portfolio beyond its COVID-19 vaccine. The company recently added an FDA-approved flu vaccine while developing experimental shots for diseases including norovirus and Lyme disease.
Analysts had noted the cancer vaccine data could be an important catalyst for the company and potentially strengthen investor sentiment. Last month, Barclays analysts said they expect the therapy could generate about $3 billion for treating melanoma by 2035.
Shares of Moderna were trading at $103.60, while Merck climbed 7.5% before the bell.
The cancer treatment combines Merck’s Keytruda with a made-to-order mRNA vaccine from Moderna that is based on an analysis of mutations found in the patients’ own tumors.
The trial enrolled 1,137 high-risk patients with stage IIB-IV melanoma that had been surgically removed.
Volunteers were randomized to receive up to nine doses of Keytruda plus the personalized vaccine or Keytruda alone for about one year. The companies said no new safety signals have emerged in the trial. In January, the companies announced results of a mid-stage trial of the treatment showing that it reduced the risk of recurrence or death by 49% after five years.
The companies said they will present their results at an upcoming medical meeting and share them with regulators.
Melanoma is the deadliest form of skin cancer. In 2023, there were more than 1.5 million people in the U.S. living with melanoma, according to the National Cancer Institute.
President Vladimir Putin on Wednesday ordered the Russian government to launch a program to rebuild commercial warehouses damaged or destroyed by Ukraine in a month of targeted attacks.
Ukraine has carried out drone strikes against at least two dozen warehouses of Russia’s top online retailer Wildberries since July 18, causing explosions and fires that have destroyed a large chunk of its storage capacity.
Putin, without naming the company, said a number of logistics sites needed rebuilding with state involvement, and told the government to work on this.
“It is essential to ensure that the restoration of damaged facilities is carried out at a qualitatively new technological level,” he said in televised comments to a conference of ministers and business leaders on the economy.
Putin said the economy was growing modestly despite external pressure – a reference to Western sanctions – and despite Ukrainian attacks on industrial and infrastructure facilities.
“Of course, such attacks have not caused, and could not cause, critical consequences. However, they do inflict damage; this is obvious, and we fully understand and acknowledge it,” he said.
Ukraine, whose own cities, ports and logistics hubs are also under attack, says its strategy is aimed at raising the costs to Russia of continuing the war that Moscow launched in February 2022.
European Union foreign policy chief Kaja Kallas said this week that the EU would in the coming months impose its most far-reaching sanctions yet on Russia.
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