The Japanese government has approved a record budget of 122.3 trillion yen for the fiscal year 2026, focused on defense and social security, in the context of inflation.

The Japanese government has adopted a record budget of 122.3 trillion yen (approximately 665 billion euros) for the fiscal year starting on April 1, 2026, aimed at increasing spending on defense and social security, in the context of persistent inflation. The budget includes 9 trillion yen for defense, reflecting Prime Minister Sanae Takaichi's intention to modernize the armed forces, considering the deterioration of relations with China.

The Minister of Defense emphasized that Japan is facing a complex security environment, necessitating a strengthening of defense capabilities. The budget also allocates 100 billion yen for the 'SHIELD' coastal defense system, intended to protect against foreign invasions.

Additionally, financial markets are concerned about the impact of these expenditures on public debt, estimated to exceed 232% of GDP by 2025. Takaichi justifies these expenditures as necessary for stimulating economic growth, emphasizing the commitment to the financial health of the country. The budget proposal is set to be approved by parliament.