Japan is preparing for a significant stimulus package worth approximately $110 billion, aimed at stimulating economic growth and bolstering national security. The initiative, spearheaded by Prime Minister Sanae Takaichi, seeks to address domestic stagnation and escalating global uncertainties. Takaichi’s administration aims to shift Japan’s fiscal strategy from austerity to one of aggressive investment in key sectors like defense and technology. This package includes tax cuts, increased defense spending, and support for utility and food subsidies, all designed to accelerate economic activity across various vital areas. The Bank of Japan is expected to maintain low interest rates to support this policy direction. Takaichi aims for inflation driven by wage increases rather than cost-push factors. The package allocates resources towards stimulating growth across different sectors through tax cuts, utility and food subsidies, increased defense spending, and strategic investments in AI, semiconductors, and shipbuilding. This will help both domestic industries and enhance Japan’s global competitiveness in technology and defense. The history of past stimulus packages has shown a correlation between large Japanese fiscal injections and capital outflows from the yen, leading to capital inflows into crypto assets such as Bitcoin and Ethereum. These have often acted as proxies for risk-on sentiment in global markets. 2020’s similar stimulus measures led to higher cryptocurrency trading volumes due to decreased yen value and a broader search for better yields. Japan’s past initiatives also contributed to increased liquidity in the DeFi space, benefiting retail investors following major fiscal announcements. This pattern may repeat as the yen weakens further, potentially driving more capital into crypto assets. 2020’s stimulus packages have shown similar effects on cryptocurrency markets. The new package lacks specific provisions for direct crypto startup grants but still holds potential for positive implications in the crypto ecosystem.