Japanese Prime Minister Sanae Takaichi’s government on Wednesday finalised a $19 billion supplementary budget for this fiscal year to cushion the impact of rising energy costs on households amid the risk of a prolonged Middle East crisis.

The 3.1 trillion yen ($19.47 billion) extra budget will be funded entirely through deficit-financing bonds, with the government seeking to avoid increasing overall bond issuance to the market by offsetting it with stronger tax revenues and non-tax income.

The additional spending will primarily replenish contingency reserves used to subsidise gasoline costs and utility bills as tensions in the Middle East continue.

($1 = 159.9200 yen)

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(Reporting by Makiko Yamazaki; Editing by Himani Sarkar)