Japan Approves Record $785B Budget, Vows Debt Control Amid Rising Costs

• Japan's cabinet, led by PM Sanae Takaichi, approved a record $785 billion (122.3 trillion yen) budget for the next fiscal year.
• The budget aims to balance proactive fiscal policy with debt control, limiting new bond issuance despite increased spending.
• New government bond issuance will slightly rise to 29.6 trillion yen, but the debt dependence ratio will fall to 24.2%, lowest since 1998.
• Higher tax revenues (83.7 trillion yen) will help fund the budget, though debt-servicing costs are projected to jump 10.8% to 31.3 trillion yen.
• Takaichi plans to shift Japan's fiscal consolidation goal from an annual primary budget balance to a multi-year target for greater flexibility.

Why It Matters: Japan's record budget balances spending with debt control, shifting fiscal strategy amid rising costs.