© . FILE PHOTO: Japanese Prime Minister Fumio Kishida holds a press conference in Tokyo, Japan, March 16, 2022. Stanislav Kogiku/Pool via REUTERS By Kentaro Sugiyama and Daniel Leussink TOKYO () -Japanese Prime Minister Fumio Kishida on Tuesday ordered his cabinet to hold a meeting by the end of April put together a new aid package to cushion the economic blow of rising fuel and raw material prices. The package is likely to include an extension of a gasoline subsidy for oil distributors, as well as other steps to ease pressure on businesses and households affected by rising raw material costs. “We must prevent rising fuel, raw material and food prices from having a huge impact on people’s livelihoods and economic activity,” Kishida told his ministers, underlining the policy dilemma facing Japan and the rest of the world as the crisis in Ukraine worldwide inflationary pressures. For now, the government will tap into special reserves set aside under the 2022 budget to fund spending measures, Kishida said. The 5.5 trillion yen ($44.4 billion) in special reserves has been earmarked primarily for emergency spending to deal with the COVID-19 pandemic. Kishida is under pressure, including from his party’s ruling coalition partner, Komeito, to put together an additional budget, rather than relying solely on reserves, to ramp up aid package spending. “The prime minister’s order was to devise ways to support not only businesses but households as well,” Economy Minister Daishiro Yamagiwa told reporters. Rising fuel and commodity prices have put additional pressure on the Japanese economy, which has lagged other countries in making a sustainable recovery from the impact of the pandemic. Poor Japan depends on imports for its energy needs. The new aid package could reach 3-5 trillion yen as policymakers would likely argue that smaller spending would not have a substantial impact on the economy, said Atsushi Takeda, chief economist at the Itochu Economic Research Institute. “People who have received money still have money that has not been spent. Economic conditions are likely to improve as long as the coronavirus ends — regardless of whether additional economic measures are in place or not,” Takeda said. Political pressure for major fiscal spending is expected to increase in the run-up to the summer’s upper house elections, which Kishida must win to tighten his grip on power within his ruling Liberal Democratic Party. ($1 = 123,8400 yen) Disclaimer: Fusion Media would like to remind you that the data on this website is not necessarily real-time or accurate. All CFDs (Stocks, Indices, Futures) and Forex prices are not provided by exchanges but rather by market makers, and therefore prices may not be accurate and may differ from the actual market price meaning prices are indicative and not suitable for trading purposes . Therefore, Fusion Media does not bear any responsibility for any trading losses that you may incur as a result of using this data. Fusion Media or anyone associated with Fusion Media accepts no liability for any loss or damage resulting from reliance on any information, including data, quotes, charts and buy/sell signals on this website. Be fully informed about the risks and costs associated with trading the financial markets, it is one of the riskiest forms of investment possible.