Japan's Cabinet on Friday approved a draft budget of nearly $680 billion for the next fiscal year. This is slightly larger than the current year's main budget, and the first increase in three years.
But it requires a record amount of new debt in order to finance spending, due to the lower tax revenues that have resulted from Japan's ailing economy. The government plans to issue more than $300 billion in new bonds in the next business year, up about 22 percent from this year's budget.
This figure far surpasses Prime Minister Junichiro Koizumi's pledge to limit new bond issues to $250 billion. Commentators say the broken promise demonstrates Japan's difficulty in restraining public debt while struggling to keep the economy afloat.
The draft budget calls for big cuts in spending on public works and foreign aid - both traditional symbols of pork-barrel politics - according to Economics Minister Heizo Takenaka.
Mr. Takenaka says a difficult decision has been made in setting budget priorities, because there were various opinions, including a call for more bold fiscal reconstruction.
There will be an increase in production in China by a major Japanese automaker. Honda says its annual production of vehicles in Guangzhou will quadruple by early 2004 to about 240,000 sedans and mini-vans. Japan's second-largest automaker expects its sales in China will also grow, as the car market there is rapidly expanding.
Worldwide, Honda aims to sell a record 3.1 million vehicles next year, and is upping production levels at factories in Brazil and Thailand as well. The total sales target is 10 percent higher than this year's projections.
And there's news of a Japanese-French-American joint venture in the sports area. Dentsu, Japan's largest advertising agency, says it will work with French communications giant Publicis Groupe to carry out sports marketing activities on a global scale.
The new company, to be headquartered in Switzerland and called International Sports and Entertainment, will be capitalized at about $10 million. The Japanese and French companies will each take a 45 percent stake, with the remaining shares to be owned by an American firm, Sports Mondial.