The 18.3-trillion-yen budget passed the upper house, in which Takaichi’s ruling coalition does not have a majority but managed to receive support from opposition parties to enact the measure.

As the budget was approved, the prime minister stood up in the chamber and bowed deeply as is tradition on such an occasion.

It is designed to pay for a 21.3-trillion-yen stimulus that Takaichi announced last month, including energy subsidies, cash handouts, and investment incentives in key fields like semiconductors and artificial intelligence.

It also includes expanded spending on defence, as China increases military activities in the wider region.

“We will implement strategic fiscal spending to protect people’s livelihoods and build a strong economy,” Takaichi said last month.

More than 60 percent of the planned spending will come from new government bonds, rekindling the market’s anxiety about Japan’s fiscal health.

Japan already has the biggest ratio of debt to gross domestic product (GDP) among major economies, projected to reach 232.7 percent this year, according to the International Monetary Fund.

Under Takaichi’s leadership, Japan’s long-term rates have climbed to the highest level in nearly two decades as investors dumped Japanese government bonds.