Japan's budget request for the next fiscal year swells to 143.1 trillion yen, approaching pandemic-era highs, as expansionary policies drive borrowing costs to a 30-year peak.

(1) Japan’s Ministry of Finance announced on Friday that the total budget requests submitted by various government departments for the 2025 fiscal year have reached 143.1 trillion yen (approximately 917.78 billion US dollars). Compiled under a unified framework for both the initial and supplementary budgets, the scale is now approaching the spending levels seen during the COVID-19 pandemic. (2) The total requested amount exceeds the comprehensive spending plan of 140.61 trillion yen finalized in Prime Minister Kishida’s first year in office (including a supplementary budget of 18.3 trillion yen for fiscal year 2025 and an initial budget of 122.3 trillion yen for fiscal year 2026), highlighting that the expansionary fiscal agenda is driving up the Japanese government’s borrowing costs to a three-decade high. (3) The budget expansion reflects the core contradiction of Kishida’s economic policy: on one hand, it increases investment in strategic sectors; on the other, it raises interest rates and brings more market attention to the scale of government bond issuance next year.