The Diet on Thursday enacted a record 96.34 trillion yen budget for the fiscal year to March 2016, including fresh economy-boosting stimulus and more defense spending as Tokyo eyes an increasingly assertive China.
The upper house passed the budget after the lower house passed it last month.
Among the spending is 5.97 trillion yen for public works, while other funds will pay for programs such as child-care and medical assistance which are aimed at luring more women into the workforce, a key part of Prime Minister Shinzo Abe's bid to stimulate the long-tepid economy, dubbed Abenomics.
Japan's defense spending will also set a record at 4.98 trillion yen as the hawkish Abe looks to strengthen surveillance of territorial waters amid ongoing diplomatic battles with Beijing over the ownership of islands in the East China Sea.
Almost one-third of the budget is for social security programs, estimated to cost a record 31.53 trillion yen, up 3.3% from the fiscal 2014 budget and underscoring how Japan's rapidly aging population is straining the public purse.
One quarter of the package will cover Tokyo's debt-servicing costs with plans to issue fresh bonds worth 36.9 trillion yen to help pay for the increased spending.© Japan Today/AFP