Reuters reports that the Ministry of Finance said that Japan's cabinet approved on Monday a record $1.03 trillion budget draft for the next fiscal year starting in April 2021, as the coronavirus and stimulus spending puts pressure on already dire public finances.

The 106.6 trillion yen ($1.03 trillion) annual budget also got a boost from record military and welfare outlays. It marked a 4% rise from this year's initial level, rising for nine years in a row, with new debt making up more than a third of revenue.

In Japan, fiscal reform has been shelved as Prime Minister Yoshihide Suga prioritised efforts to contain the pandemic and boost growth, despite public debt at more than twice the size of Japan's $5 trillion economy.

The spending plan must be approved by parliament early next year.

It will be rolled out along with a third extra budget for this fiscal year as a combined 15-month budget aimed for seamless spending to ease the virus pain and back Suga's goal of achieving carbon neutrality and digital transformation.