Tokyo – The Japanese finance ministry announced that debt‑service costs are expected to rise 17% in the fiscal year beginning in 2027, reaching a record 36.64 trillion yen (about $230 billion). The increase reflects a planned assumption that the interest rate used to calculate debt‑service obligations will be set at 3.8%, the highest level in 29 years.

Budget context and policy direction

For the same fiscal year, total budget requests from ministries and agencies are projected to exceed 130 trillion yen for the first time, up from roughly 122 trillion yen in the current year. The surge is linked to Prime Minister Sanae Takaichi’s push for a more expansionary fiscal policy, including a public‑investment scheme that lets ministries seek funding without a preset cap.

The government also intends to move spending that has traditionally been covered by supplementary budgets into the initial budget, a step that could further raise headline expenditures.

Next steps in the budgeting process

Budget requests will be finalized at the end of the month. The finance ministry will then review them and compile a draft budget, which is expected to be approved by the cabinet before year‑end.

These figures were reported by Kyodo News and cited by Reuters. (Exchange rate: $1 = 159.4700 yen.)

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.