Japan budget requests swell to pandemic-era scale under Takaichi
TOKYO: Japan's budget requests for the next fiscal year have ballooned to a size similar to during the pandemic era, as Prime Minister Sanae Takaichi's expansionary fiscal agenda pushes government borrowing costs to three-decade highs.
Japan's budget requests for the upcoming fiscal year have soared to pandemic-era levels, according to Prime Minister Sanae Takaichi's expansionary fiscal plan. Government agency budget requests totaled 143.1 trillion yen (US$917.78 billion), as reported by the Finance Ministry on Friday. This figure surpasses the 140.61 trillion yen combined spending package from Takaichi's first year in office.
The budget surge highlights the tension between Takaichi's push to invest in strategic sectors and the resulting rise in borrowing costs, which have reached three-decade highs. Finance Minister Satsuki Katayama downplayed the sharp increase, stating that it amounted to only about 2.5 trillion yen. However, the budget could potentially grow further due to unspecified items, including defense spending proposals.
The rise in budget requests is partly attributed to 12.2 trillion yen in investments for sectors like artificial intelligence and semiconductors, as well as borrowing costs prompting the ministry to raise its assumed interest rate to 3.8 percent. Katayama emphasized that the government is closely monitoring the bond market and the increasing debt-servicing costs.
Market attention will focus on the scale of new government bond issuance in the upcoming fiscal 2027 budget, which Takaichi aims to keep around 40 trillion yen.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
