Tokyo, Dec. 26 -- Japan's Cabinet on Friday approved a record initial budget of JPY 122.31 trillion (approximately USD 783 billion) for fiscal 2026, underscoring the newly appointed Prime Minister Sanae Takaichi's expansionary fiscal approach aimed at stimulating economic growth and strengthening defence capabilities, despite mounting concerns over the country's fragile public finances, Kyodo News reported.

According to Kyodo News, the general-account budget marks the second consecutive year of record-high spending, surpassing the JPY 115.20 trillion initial budget for fiscal 2025.

Officials said rising prices have pushed up personnel and other fixed costs, while Japan's rapidly ageing population continues to drive welfare-related expen...