Japan approves record $730 billion budget for next fiscal year

Japan’s cabinet on Friday approved a record $730 billion budget for the fiscal year starting in April, cutting new bond issuance to a 17-year low on record tax revenues.

The budget for the fiscal year starting in April is estimated at 115.5 trillion yen ($732.36 billion), up 2.6 percent from the initial 112.6 trillion yen budget this year, due to debt servicing and social security costs.

The Japanese government said on Tuesday it expects economic output to recover to full capacity in the next fiscal year for the first time in seven years on an annual basis, due to a strong labor market.

The output gap, which measures the difference between actual output and full production capacity, is likely to be plus 0.4 percent in the fiscal year starting in April, according to estimates released by the Cabinet Office.