Japan Approves Record ¥122 Trillion Budget for FY26 Amid Debt Concerns

📌Key Points

• •Japan's cabinet approved a record ¥122.3 trillion ($786 billion) initial budget for the fiscal year starting April 2026.
• •This marks a 6.3% increase from the current fiscal year's budget and is the largest on record.
• •New government bond issuance will be ¥29.6 trillion, but the debt reliance ratio will fall to 24.2%, the lowest since 1998.
• •Defense spending will reach a record ¥9.04 trillion, prompting criticism from China.
• •Debt-servicing costs will jump 10.8% to ¥31.3 trillion due to an assumed 3.0% interest rate.
• •The finance ministry plans to cut super-long bond issuance to a 17-year low to address market concerns over rising yields.