Massive budget requests, rising bond yields to worsen Japan's fiscal situation: report

The massive budget requests for the new fiscal year, coupled with rising government bond yields, will further worsen Japan's fiscal situation, according to a report by Kyodo News on Friday.

Budget requests from Japanese government ministries and agencies for fiscal 2027 are expected to exceed 130 trillion yen (around 818 billion U.S. dollars), a significant increase from the current fiscal year's initial budget of 122.31 trillion yen (769.5 billion U.S. dollars), the report said.

With the government projecting tax revenues of approximately 83 trillion yen (522.2 billion U.S. dollars) for fiscal 2026, the massive spending requests could force the government to issue more debt, further aggravating fiscal pressures, it noted.

Meanwhile, Japanese government bond yields have continued to rise amid growing concerns over the country's deteriorating fiscal health.

Japan's benchmark 10-year government bond yield, a key indicator of long-term interest rates, climbed to 2.495 percent on Tuesday, its highest level in three decades and approaching the closely watched 3-percent threshold for the first time since October 1996.

Massive budget requests, rising bond yields to worsen Japan's fiscal situation: report

The Trump administration has initiated procedures to pay 725 million U.S. dollars toward U.S. arrears owed to the United Nations, according to a State Department notification to Congress on Thursday.

The payment is expected to be completed before President Trump travels to New York next month to attend the UN General Assembly and deliver an address.

However, the 725 million U.S. dollars represents less than 20 percent of the total amount the United States owes.

In May, the United Nations said U.S. arrears exceeded 4 billion U.S. dollars. The U.S. side maintains that the actual total is lower than that figure.

Under the UN Charter, a member state may lose its voting rights in the General Assembly if its arrears equal or exceed the total assessments due for the preceding two years.

The United States is the largest contributor to the UN budget. The Trump administration had previously refused to pay some mandatory assessments for the UN regular budget and peacekeeping budget, cut voluntary funding to multiple UN agencies, and withdrawn from several international organizations.

US to pay 725 million dollars in overdue UN arrears