Katayama: will do best to pass budget as soon as possible

Katayama: will do best to pass budget as soon as possible

Katayama Urges Swift Passage of FY2025 Supplementary Budget to Strengthen Japan’s Economy

Finance Minister Satsuki Katayama has reiterated her call for rapid approval of Japan’s FY2025 supplementary budget, emphasizing its critical role in addressing inflation, boosting economic resilience, and safeguarding national security. Speaking before the Lower House on December 8, 2025, Katayama highlighted the need for cross-party cooperation to enact the budget, which allocates ¥18.3 trillion in new expenditures under the "Comprehensive Economic Measures to Build a Strong Japanese Economy" approved by the Cabinet in November 2025.

The supplementary budget prioritizes three key initiatives: mitigating rising prices to protect households and businesses, strategic investments to enhance economic resilience and growth, and strengthening defense and diplomatic capabilities. Specifically, ¥8.9 trillion will target inflation relief, ¥6.43 trillion will fund growth-oriented infrastructure and crisis preparedness, and ¥1.66 trillion will bolster defense and foreign policy efforts. The total general account expenditure after the supplement is projected to reach ¥133.5 trillion, reflecting an ¥18.3 trillion increase from the original FY2025 budget.

Katayama’s urgency is underscored by Japan’s fragile economic recovery, where wage growth has lagged behind inflation, dampening consumer spending and private demand. The government also faces challenges in securing funding for a planned consumption tax cut, with Prime Minister Sanae Takaichi recently directing Katayama’s ministry to accelerate discussions on fiscal measures to offset the tax reduction’s revenue shortfall.

To balance fiscal sustainability, the supplementary budget includes ¥11.7 trillion in new public bond issuance, while tax revenues and non-tax income are expected to rise by ¥2.88 trillion and ¥1.02 trillion, respectively. Katayama has stressed the importance of passing the budget swiftly to stabilize markets and restore confidence, particularly amid global economic uncertainties and ongoing U.S.-Japan trade negotiations.

With the Diet’s autumn session slated to address the measures, Katayama’s push for expedited approval reflects the government’s broader strategy to transition Japan from a deflationary to a growth-oriented economy. However, challenges remain in aligning fiscal expansion with long-term debt management, as Japan’s public debt-to-GDP ratio remains among the highest in the developed world.

For investors, the outcome of these efforts will be pivotal in shaping Japan’s economic trajectory and its ability to navigate global headwinds.