Japan's lower house of parliament passes record budget

TOKYO: The lower house of Japan's parliament passed on Tuesday a record 114.4 trillion yen ($839.3 billion) budget for the next fiscal year that begins in April, a ruling party lawmaker said, a move that would further strain the industrial world's heaviest debt burden.

The fiscal 2023 budget featured record military and welfare spending to cope with threats from mighty China and North Korea, and welfare spending for catering to a fast-ageing population.

Despite the heavy public debt, Prime Minister Fumio Kishida's government has already floated another plan to double childcare outlay to arrest the dwindling birthrate, keeping stretched finances under pressure.

The budget passage in the powerful lower chamber makes it almost certain of its approval by the upper house by the current fiscal year end in March.

In Japan, long-term interest rates are on the rise, which are still well below those in the United States and Europe, testing the BOJ's ability to keep borrowing costs low in a country accustomed to decades of near zero inflation.

Kishida's controversial plan to double Japan's defence spending to 2% of gross domestic product by 2027 contributed to a record 6.8 trillion yen increase in spending.