Item 1 of 2 People walk at a shopping area of Shinjuku in Tokyo, Japan, September 11, 2025. REUTERS\/Fabrizio Bensch<\/p>\n
[1\/2]<\/b>People walk at a shopping area of Shinjuku in Tokyo, Japan, September 11, 2025. REUTERS\/Fabrizio Bensch Purchase Licensing Rights, opens new tab<\/a><\/p>\n TOKYO, Dec 24 (Reuters) – Japan plans to issue new government bonds worth around $189 billion to fund a record-size budget for next fiscal year, a draft reviewed by Reuters showed on Wednesday, underscoring the administration’s expansionary fiscal policy stance.<\/p>\n The annual budget, to be finalised on Friday, will be the first to be compiled by Prime Minister Sanae Takaichi, who has made “proactive” spending a flagship of her economic policy.<\/p>\n Sign up here.<\/a><\/p>\n The estimated bond issuance of around 29.6 trillion yen ($189.55 billion) for the 2026 budget would exceed the planned 28.6 trillion yen issuance for the current fiscal year, the draft showed, confirming an earlier report<\/a> by public broadcaster NHK.<\/p>\n The total size of next fiscal year’s budget will likely be around 122.3 trillion yen, exceeding this year’s 115.2 trillion yen, a new record, the draft showed.<\/p>\n Tax revenues will likely rise to around 83.7 trillion yen from an estimated 80.7 trillion yen in the current fiscal year, the draft showed, hitting a record but not enough to finance rising social welfare, defence and debt-servicing costs.<\/p>\n The huge spending will come on top of a 21.3 trillion yen stimulus package, compiled in November and funded by a supplementary budget for the current fiscal year, that focused on cushioning the blow to households from rising living costs.<\/p>\n Concerns about debt oversupply have pushed up bond yields, with the yield on the 30-year bonds rising 2.5 basis points to 3.45% on Wednesday to hit another record high.<\/p>\n Takaichi, since taking office in October, has stressed the need to focus on revitalising the economy and signaled watering down the government’s target for restoring Japan’s finances.<\/p>\n But her administration has toned down<\/a> talk of aggressive fiscal spending as bond yields rose.<\/p>\n In an interview with the Nikkei newspaper published on Tuesday, Takaichi said the government will not resort to “irresponsible” debt issuance or tax cuts. She also said Japan’s debt-to-GDP ratio, while improving as a trend, remained high.<\/p>\n ($1 = 156.1600 yen)<\/p>\n Reporting by Takaya Yamaguchi; Writing by Leika Kihara; Editing by Christopher Cushing and Muralikumar Anantharaman<\/p>\n Our Standards: The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n