Japan Finalizes Record ¥122.3 Trillion Budget for FY2026, Sparking Fiscal Concerns

A staggering ¥122.3 trillion. Japan is poised to approve its largest-ever national budget, signaling a continued reliance on massive fiscal stimulus even as concerns over its colossal public debt mount.

Record Spending Plan Heads to Diet

According to government sources, final adjustments on December 24th brought the draft general account budget for fiscal year 2026 to approximately ¥122.3 trillion (about $840 billion). This marks the 12th consecutive year of record-breaking budgets in Japan. The government plans to convene the ordinary session of the Diet on January 23rd to push for the bill's passage.

The Dilemma of Rising Costs

A primary driver of the budget expansion is the ballooning social security cost for Japan's aging population. Underscoring this trend, the government recently finalized a 2.22% overall increase in medical service fees for the upcoming fiscal year, a move that will further strain public finances. Amid this spending pressure, Economic Security Minister Sanae Takaichi called on December 25th for a debate on fiscal management targets. Her comments suggest a growing internal discussion about how to balance stimulus with long-term fiscal discipline.