According to Jinshi Data, the Japanese government draft shows that the budget needs of various Japanese government departments in the next fiscal year may exceed 110 trillion yen (about 698 billion US dollars) for the fourth consecutive year as the expected interest rate hike will increase debt costs.
Japan’s public debt is twice the size of its economy, the highest among industrialized nations, and borrowing could become more expensive as the Bank of Japan considers raising interest rates from near zero now.
The budget request for the fiscal year starting in April 2025 is expected to be submitted to the Ministry of Finance by the end of August. The scale of the request may even exceed the record 114.38 trillion yen for this fiscal year due to rising interest rates. The cabinet is expected to approve the Ministry of Finance's draft budget by the end of the year.
The 10-year Japanese bond yield hit its highest in more than a decade as markets braced for further tightening by the Bank of Japan.
