Japan approves record JPY106 trillion draft budget for FY22

Japan’s Cabinet office approved a record-high budget worth JPY106 trillion for fiscal year (FY) 2021-22 on Monday, Reuters reported, citing a draft of the budget.

Key details

Japan approves new record budgets for the ninth straight year.

New bond issuances will jump JPY11 trillion to JPY43.60 trillion.

41% of the budget will be funded by debt, up from circa 32% this fiscal year.

Japan sets record $52 billion military budget with stealth jets, long-range missiles.

Market reaction

USD/JPY extends its recovery towards 103.50, underpinned by a solid US dollar comeback across the board amid risk-on market mood. The renewed coronavirus concerns overshadowed the US fiscal deal optimism.