June 3, 2026

In order to implement the fiscal measures necessary for our further response to the situation in the Middle East, the government has decided to submit a supplementary budget for FY2026. Before requesting deliberation on this budget, I would like to provide an outline of the draft supplementary budget.

(Introduction)

In response to the situation in the Middle East, we have thus far advanced a range of measures to protect the lives of the people and the continuity of economic activity, including emergency action drawing on the FY2025 contingency reserves and other resources to mitigate drastic changes in fuel oil prices. In addition, on May 26, we approved the use of the general contingency reserves of the initial FY2026 general account budget to implement assistance with electricity and gas charges during the period from July to September, when usage increases, with a view to keeping rates below the levels seen last summer. We also announced, through initiatives such as “POWERR Asia,” enhanced cooperation aimed at strengthening the energy security resilience of the broader region in response to the impact on international supply chains.

Moreover, as the situation in the Middle East remains uncertain, the government has formulated a supplementary budget for FY2026. While monitoring future price trends and the impact on the economy, the government will make appropriate judgments and respond in a timely manner as needed so that economic activities and people's daily lives are not negatively affected, and make all possible preparations in financial terms, from the perspective of minimizing risk.

(Outline of the FY2026 Supplementary Budget)

Next, I would like to outline the FY2026 supplementary budget.

Regarding the general account, we are asking for approximately 3.11 trillion yen in terms of expenditures.

The details are as follows. First, regarding the Priority Support Local Allocation Grant, we have appropriated 100 billion yen as an additional measure to provide financial measures for support tailored to local circumstances, including support for those using extra high voltage power service or liquefied petroleum gas (LP gas). Second, as “Preparing thoroughly for the future,” we have appropriated approximately 510 billion yen to restore the balance of the general contingency reserves—which were recently decided to be used for assistance with electricity and natural gas charges—to 1 trillion yen. In addition, we will establish a new “Reserve Fund for responding to the situation in the Middle East and other matters,” to be used for expenses required to respond to the effects on Japan arising from changes in the international situation such as soaring energy prices associated with the situation in the Middle East, for which we have appropriated 2.5 trillion yen.

In terms of revenue, we will issue special deficit-financing bonds worth approximately 3.11 trillion yen.

As a result, the total general account budget for FY2026, after the supplement, will be approximately 125.42 trillion yen, which is an increase of approximately 3.11 trillion yen in both revenue and expenditure.

As I mentioned, approximately 3.11 trillion yen in special deficit-financing bonds will be added on the revenue side of the FY2026 general account supplementary budget. However, of the special deficit-financing bonds for the previous fiscal year, around 3 trillion yen that are slated to be issued up until June are expected not to need to be issued, given projected tax revenues, non-tax revenues and unspent appropriations. By making adjustments within the overall projected sovereign bond issuance amount, it will be possible to respond without increasing the amount of bonds issued into the market. We therefore believe it is possible to execute our plan without impacting the sovereign bond market.

Also, necessary supplementary measures have been made to the special account budget.

(Conclusion)

This concludes my explanation of the outline of the supplementary budget for FY2026. I hereby request that the Diet deliberate on the supplementary budget and promptly give its approval.