Japan’s budget requests from ministries and agencies for fiscal 2027 are set to exceed JPY130 trillion ($818bn), a new record, as the government pushes investment in growth sectors and national security, sources close to the matter reportedly said on August 21.

The total would be significantly above the previous record of JPY122 trillion. Fiscal 2027 begins in April.

According to Japan’s Kyodo News, in a major change to the budget process, Prime Minister Sanae Takaichi’s government has not imposed caps on ministries’ requests for growth-strategy spending. It also plans to secure funding for policies requiring several years of implementation, rather than assuming that additional spending will be covered by a supplementary budget.

The draft budget expected by the end of the year could rise further from the initial requests. Spending on many items will not be finalised until negotiations are completed, the sources said.

Government tax revenue for fiscal 2026 is forecast at JPY83 trillion. Requests exceeding the figure of JPY130 trillion are therefore likely to require additional debt issuance, putting further pressure on Japan’s public finances, already the weakest among advanced economies.