Japan to See First Primary Balance Surplus in 28 Years in 2026

Japan is set to record its first primary balance surplus in 28 years in fiscal 2026, Prime Minister Sanae Takaichi said, in an apparent effort to ease market concerns over her expansionary fiscal stance, Erica Yokoyama reported for Bloomberg News.

Restoring a primary balance surplus has been a government objective for more than two decades.

“The national government’s initial budget is expected to post a primary balance surplus for the first time since 1998,” Takaichi told reporters on Friday, after the Cabinet approved a record ¥122.3 trillion ($782 billion) budget for fiscal 2026 earlier in the day.

“I believe we have put together a budget that strikes a balance between achieving a strong economy and ensuring fiscal sustainability.”

Restoring a primary balance surplus has been a government objective for more than two decades.

The metric measures the difference between government revenue and spending, excluding debt-servicing costs. Achieving the target supports the view that Japan is making progress in addressing long-standing concerns about its public finances, The Japan Times also reported.