Japan’s Ministry of Finance requests 38.7T yen budget as total government spending bids shatter records

Japan’s Ministry of Finance has submitted a budget request of 38.7 trillion yen for fiscal year 2027, covering the period from April 2027 through March 2028. Combined budget requests from all ministries and agencies have blown past 130 trillion yen, topping the previous record of 122 trillion yen. Where the money is going The Ministry of Economy, Trade and Industry, known as METI, has put in the most eye-catching sectoral request, seeking approximately 7.7 trillion yen. Of that, around 4.5 trillion yen is earmarked specifically for growth strategy investments, with artificial intelligence and semiconductor development sitting at the top of the priority list. Budget requests from all ministries were due by the end of August 2026. The MOF is expected to compile a draft budget by late 2026, meaning the figures will still go through a negotiation and trimming process before anything is finalized. The 130-trillion-yen headline is a ceiling, not a floor. The bond market problem hiding in plain sight With tax revenues projected at 83 trillion yen against total spending requests that far exceed that figure, the government will need to issue additional bonds to bridge the difference. Japan ...