Finance
Japan's cabinet approves record $730 billion budget for next fiscal year
Published by Global Banking & Finance Review®
Posted on December 27, 2024
2 min readLast updated: January 27, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 27, 2024
2 min readLast updated: January 27, 2026
Japan's cabinet approved a record $730 billion budget for 2024, reducing bond issuance to a 17-year low due to high tax revenue. The budget faces parliamentary challenges.
TOKYO (Reuters) - Japan's cabinet on Friday approved a record $730 billion budget for the fiscal year starting in April, while limiting new bond issuance to the lowest in 17 years on the back of record tax revenue.
The budget for the fiscal year that starts in April is estimated at 115.5 trillion yen ($732.36 billion), up 2.6% from the current year's initial amount of 112.6 trillion yen, driven by debt-servicing and social security costs.
But record tax revenue is likely to help reduce new bond issuance to 28.6 trillion yen, the lowest since 2008.
As a result, the debt dependence ratio will stand at 24.8%, meaning new bond sales account for a quarter of the budget. It represents the first drop below 30% since 1998.
The budget plan may struggle to get through parliament, however, as Prime Minister Shigeru Ishiba's ruling coalition needs support from opposition parties to pass legislation since the loss of its majority in the October election.
A key opposition party is demanding a more aggressive lifting of the income tax threshold in effective tax cuts, potentially hurting tax revenue.
(Reporting by Makiko Yamazaki; Editing by Himani Sarkar and Muralikumar Anantharaman)
The article discusses Japan's approval of a record $730 billion budget for the 2024 fiscal year and its implications.
Bond issuance is at a 17-year low due to high tax revenue, reducing Japan's debt dependence ratio.
The budget may struggle in parliament as the ruling coalition lacks a majority and faces opposition demands for tax changes.
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