The upper house of Japan's Diet passed the general budget for fiscal year 2026 on April 7, with 122.3 trillion yen ($766 billion) in spending, up 6.2% from 2025. This includes 8.89 trillion yen in defense spending, hitting Prime Minister Sanae Takaichi's goal of reaching 2% of gross domestic product two years ahead of schedule, but it did not include a two-year suspension of the food consumption tax, like Takaichi had campaigned on ahead of Feb. 8 snap lower house elections.

The Ministry of Finance's Budget Bureau reportedly pressured Takaichi to choose between her defense spending hike and the food tax cut, asserting that doing both would require defense bonds and would spook markets. Still, the finance ministry agreed to consider the food tax cut later this summer.