Japan's medical expenses in the year to March 2015 are certain to hit a new high above ¥40 trillion ($332 billion) on the back of the nation's graying population, health ministry data showed Thursday.

Spending is likely to set a record for the 12th straight year as the released data, accounting for around 98 percent of the total but excluding expenses such as those related to industrial injury insurance, came to ¥39.96 trillion.

The figure is around ¥700 billion or 1.8 percent more than the previous year, the Ministry of Health, Labor and Welfare said.

In addition to the increasing proportion of elderly people, the continuous growth reflects advances in medical technology that have made services more expensive, a ministry official said.

The official added that the greater use of cheaper generic medicines has slowed the rate of increase compared to previous years.