On August 21, the Japanese newspaper Kyodo News reported exclusively that the total amount requested by various government departments for the Japanese government's budget for the year 2027 is expected to exceed 130 trillion yen for the first time. This represents a remarkable increase compared to the 122 trillion yen requested in the year 2026, marking a four-year consecutive record high.
On August 22, the Japanese newspaper Nikkei Asia also reported that Japanese Prime Minister Shigeru Akamatsu's attempts to reduce food consumption taxes and increase defense spending are the main reasons for the surge in fiscal expenditure. The report stated that as the total budget request for Japan's fiscal year 2027 is expected to far exceed that of the previous fiscal year, the government may have to find ways to raise additional funds of over 10 trillion yen to fill the fiscal gap.
According to reports, at a meeting held by the foreign policy group of the ruling Liberal Democratic Party on August 21, the Japanese Ministry of Foreign Affairs proposed a plan to apply for more than 200 billion yen in funding under the so-called 'Strong and Prosperous Japan' initiative led by Prime Minister Kei Shibasaki. This initiative aims to direct investments into 17 strategic areas.
Since there is no upper limit on the amount requested in this investment framework, the total budget request from Japan's Ministry of Foreign Affairs has also surpassed the 1 trillion yen mark for the first time.
In addition, the Ministry of Economy, Trade and Industry of Japan has applied for approximately 7.7 trillion yen. Of this amount, only about 4.5 trillion yen is planned to be requested under this investment framework. This funding will be used for the development of artificial intelligence (AI) and semiconductors.
