Fiscal Insight: Guidelines for the FY2027 budget request

Research evidence excerpt

Fiscal Insight: Guidelines for the FY2027 budget request

Global Markets Research

30 July 2026Fiscal Insight

Rates - Japan

Research Analysts

Guidelines for the FY2027 budget request Fiscal Policy

Masaki Kuwahara - NSC

No cap on requests for the growth strategy “investment quota”. masaki.kuwahara@nomura.com

+81 3 6703 3876

On 30 July, the Cabinet gave its approval to the guideline for the FY2027 budget requests.

Based on this guideline, each ministry will submit its budget request by the end of August.

No cap on requests for the growth strategy “investment quota”

What will attract attention is how the fiscal policy of the Takaichi administration is reflected

in this budget request. The guideline says the government creates a new “investment

quota for a Strong and Prosperous Japan” for its growth strategy, separate from the

regular spending. For this “investment quota,” no cap will be set on requests, also in line

with the policy of moving away from a reliance on supplementary budgets.

It was also stated that, within this investment quota, “for areas particularly important to

economic security, funding will be secured over multiple years and managed separately in

a special account; this will be considered during the budget formulation process.” Nikkei

on 27 July also reported that the “investment quota” would initially be booked in the

general account at the request stage, and that the budget formulation process would

determine which items would be classified as economic-security-related and transferred

into a special account. If so, the general account expenditure amount would be smaller

than the initial budget request by that amount.

As for expenditure covered by the defense buildup plan, ministries will request the