Despite having the G7’s largest debt to GDP ratio, Japan Boots Military Spending to Record levels amid Chinese tensions.
Japan’s Prime Minister Shinzo Abe has signed off a record defense budget in the face of territorial disputes with China and North Korea’s nuclear and missile threats.
Spending on fighter jets and submarines are partly behind the increase to 5.13 trillion yen (£35.2bn, $43.6bn).
A separate coastguard budget will also be raised sharply.
The plans are part of a 97.5tn yen budget for the financial year starting 1 April 2017.
Japan’s parliament must still approve the budget, but if approved it would be the fifth consecutive rise in the defense budget.
A rising social security bill to fund the cost of services for an ageing population is already putting increasing pressure on the country’s economy, and the extra defense and coastguard spending will add to Japan’s debt.
Mike “Mish” Shedlock