A substance or treatment given more for psychological comfort than for real medical effect. Often used figuratively for any empty reassurance.
See also: 偽薬
The doctor prescribed a placebo for the patient.
His encouragement was nothing more than a placebo.
Compound of 気休め (consolation, peace of mind) and 薬 (medicine). The exact historical derivation is uncertain, but the word transparently means 'medicine for peace of mind'.