Overview
- The Cabinet’s plan totals ¥122.31 trillion and relies on ¥29.58 trillion in new bond issuance, with tax revenues projected at a record ¥83.74 trillion.
- Debt-servicing costs climb to about ¥31.3 trillion as the Finance Ministry lifts its assumed interest rate to 3.0%, reflecting higher long-term yields.
- Defense outlays reach a record ¥9.04 trillion to accelerate standoff missiles such as Type‑12, unmanned systems under the SHIELD coastal program, and hypersonic weapons research, with related U.S. base costs included.
- Social security spending rises to roughly ¥39.06–¥39.1 trillion on inflation and an aging population, while growth initiatives include a semiconductor and AI fund and plans to make high school and school meals free starting in FY2026.
- The draft will be submitted in January for enactment by March, with the ruling bloc courting the Democratic Party for the People after agreeing to raise the minimum taxable income threshold, as markets scrutinize fiscal sustainability.