Japan's Record Defense Budget Shakes Markets

Japan's government is preparing a record national budget for next year. The plan focuses heavily on defense spending, according to a report from Nikkei. This has caused alarm in financial markets. The proposed budget exceeds 112 trillion yen (approximately $770 billion). It is being prepared for Prime Minister Takaichi's cabinet. A key feature is a second consecutive year of major defense spending increases. Market analysts are concerned. They worry that such high spending, without clear plans for new taxes, will worsen Japan's massive national debt. Japan's debt is already the highest among developed nations. This budget signals a major shift. Japan is moving away from its post-war pacifist stance due to growing regional security threats. The government aims to double defense spending to 2% of GDP within five years. The final budget must be approved by the cabinet by the end of this year.