ISTANBUL

The Japanese government on Friday approved an economic package worth 21.3 trillion yen ($135 billion) to help the public grapple with rising costs.

The package includes a number of measures aimed at bolstering the fourth-largest economy in the world amid worries that higher US tariffs will hurt both businesses and average households, Kyodo News reported

When combined with spending by local governments and the corporate sector, the first stimulus package under Sanae Takaichi – who took office as prime minister just a month ago – is predicted to reach $272.3 billion, far more than the $248.1 billion in measures from the previous year, Kyodo reported.

The administration intends to boost investment in fields like shipbuilding and artificial intelligence, which are deemed essential for crisis management and national security, in addition to short-term inflation relief measures.

Takaichi says that these calculated investments will boost the nation's long-term economic prosperity.

The Japanese economy shrank for the first time in the last six quarters this July-September, with consumer spending slowing due to higher prices.

As part of the package, the government aims to provide subsidies for electricity and gas bills for the first three months of next year.

The package will also include financial assistance for local governments to implement their own measures, such as rice vouchers, to deal with rising prices.