Japanese ministries requested a record JPY143.07 trillion ($915bn) for the fiscal year starting in April 2027, the fourth consecutive annual high, the Finance Ministry said, Kyodo News reported on September 4.

The requests far exceed the JPY122.3 trillion initial budget for fiscal 2026, partly because the government wants to move spending long financed through supplementary budgets into the main budget. The total also runs more than JPY2 trillion above the combined JPY140.6 trillion of the fiscal 2025 supplementary budget and the fiscal 2026 initial budget.

Debt-servicing costs hit a record JPY36.64 trillion. The assumed interest rate used to calculate those payments was lifted to 3.8% from 3.0% in the fiscal 2026 budget.

The Health, Labour and Welfare Ministry filed the biggest single request at JPY36.58 trillion, driven by growing pension, health care and nursing-care bills in an ageing society. The Internal Affairs and Communications Ministry sought JPY21.92 trillion, mostly for grants that help local governments plug funding gaps.

The Defense Ministry asked for JPY8.84 trillion, including money to develop attack drones as Japan builds up counterstrike capabilities. The Ministry of Economy, Trade and Industry sought JPY5.70 trillion, of which JPY4.53 trillion falls under the investment category covering artificial intelligence, semiconductors and other sectors intended to draw in private capital.

Numerous ministries submitted "itemised requests" without attaching figures, leaving room for the final budget to swell further.

The Cabinet is expected to approve the draft budget by the end of the year. The government plans to send the budget bill to parliament during next year's ordinary session and secure passage by the end of March.