The Cabinet approved on Tuesday a record ¥95.88 trillion general account budget for fiscal 2014 as the administration of Prime Minister Shinzo Abe seeks simultaneously to conquer decades of deflation and restore the nation's precarious fiscal health.

With spending on defense, public works and social security programs increasing, policy spending will reach a record ¥72.61 trillion, up ¥2.24 trillion from the original budget for this year.

To promote fiscal rehabilitation, new issuance of bonds will be curbed to ¥41.25 trillion, down ¥1.60 trillion from the initial budget for fiscal 2013 due in part to an expected increase in tax revenue.