Japan likely to extend fuel subsidy to ease pain of consumers - sources

"We always hold various debates in order to secure an extension," one of the sources said.

Japan is leaning towards extending support measures for gas and electricity bills set to expire at the end of September, three government and ruling party sources with knowledge of the matter told Reuters on Tuesday, aiming to underpin a fragile economy.

The world's most heavily indebted government has been wrestling over ending subsidies for utility companies out of concern that it may turn voters away from supporting Prime Minister Fumio Kishida. Extending subsidies, however, would make it more difficult to achieve Kishida's aim of bringing the state's primary budget balance, which excludes new bond sales and debt servicing costs, into the black by the fiscal year ending in March 2026.

The scale of any new support will need to be decided, taking into account energy prices, currency moves and more broadly, inflation and its impacts on the economy, the sources said. "We always hold various debates in order to secure an extension," one of the sources said.