TOKYO (REUTERS) – Japanese Prime Minister Fumio Kishida on Monday (Aug 15) instructed his ministers to draw up additional steps to cushion the economic blow from rising living costs in a package due to be compiled next month.

As part of the measures, Mr Kishida said he has ordered the government to hold off on raising the price of imported wheat it sells to retailers in October – a move that would essentially subsidise households to cope with surging commodity prices.

In a meeting on steps to combat rising living costs, Mr Kishida also said he has instructed the Trade Ministry to come up with additional plans to curb rises in fuel and electricity bills.

Chief Cabinet Secretary Hirokazu Matsuno said the government will aim to compile the package of measures early next month, and tap roughly 4.7 trillion yen (S$48.4 billion) remaining in state reserves to cover the cost. The government did not release the estimated size of total spending for the package.

Coping with rising commodity costs has been among top priorities for Mr Kishida’s administration, as Japan’s heavy reliance on imports for energy and food makes its economy vulnerable to rising global raw material prices.

The Russia-Ukraine war has intensified the commodity cost pressures globally.

Wheat is among products that saw prices surge as a result of the war. In Japan, the government is in charge of importing wheat from overseas, and sets in each April and October the sales price it charges to retailers.

The price the government charged retailers for imported wheat jumped 17.3 per cent in April from last October due to rising global commodity prices, leading to hikes for a wide range of daily staples including bread and pasta.

If rising global costs are fully reflected, the price the government charges retailers could rise a further 20 per cent in October, said Mr Kishida, adding that he has instructed the agriculture minister to ensure that prices are maintained at current levels beyond October.