Japan’s Record ¥122.3 Trillion FY26 Budget Sparks Debt Concerns Amid Crypto Market Watch
Japan's government unveiled a ¥122.3 trillion ($850 billion) budget for fiscal 2026, marking a 6.3% spending increase fueled by inflation pressures and defense needs. Finance Minister Takaichi framed the plan as balancing economic stimulus with fiscal sustainability, though bond yields edged higher on concerns over the world's heaviest debt burden.
The budget relies on ¥29.6 trillion in new bond sales, reducing debt financing to 24.2% of total spending—a marginal improvement from 24.9% this year. 'This isn't fiscal discipline, it's fiscal fatigue,' remarked Koji Takeuchi of Itochu Research Institute, noting record spending despite flat bond issuance.
Cryptocurrency markets monitored the announcement for ripple effects, as Japan's debt dynamics could influence global risk appetite. Bitcoin and ethereum held steady during Asian trading, while memecoins like SHIB and PEPE saw muted volatility. Exchange platforms including Binance and Coinbase reported typical JPY-denominated crypto flows.
Defense appropriations surged 16% alongside social security spending, reflecting demographic pressures. The budget assumes 1.3% GDP growth and 2.5% inflation—a gamble as price hikes persist beyond the Bank of Japan's target. 'They're buying time with bonds,' said a Mizuho strategist, 'but the clock's ticking on debt sustainability.'
