Japan Approves Record $785 Billion Budget, Takaichi Balances Spending & Debt

• 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 increased spending with debt concerns by keeping new bond issuance in check, despite higher government bond yields and a weak yen.
• New government bond issuance will rise only marginally, and the debt dependence ratio will fall to 24.2%, the lowest since 1998.
• Stronger tax revenues (up 7.6% to 83.7 trillion yen) will help finance spending, but rising debt-servicing costs (up 10.8% to 31.3 trillion yen) remain a challenge.
• PM Takaichi plans to shift from an annual primary budget balance target to a multi-year fiscal consolidation goal for greater spending flexibility.

Why It Matters: Japan's record budget balances spending with debt control, shifting to a multi-year fiscal target.