The Diet has enacted an extra budget worth ¥622.5 billion for fiscal 2016 through March to provide disaster relief and increase defense spending.
The third supplementary budget for the current fiscal year includes ¥195.5 billion for areas hit by powerful typhoons and earthquakes in 2016 and ¥170.6 billion to bolster defense capabilities amid the North Korean missile threat. Around ¥168.5 billion is earmarked for contributions to international organizations.
The budget was approved Tuesday by the Upper House following its passage through the Lower House on Friday.
The yen's advance against the dollar ahead of the U.S. presidential election in November forced the government to cut its tax revenue outlook for fiscal 2016 by ¥1.74 trillion from its original estimate.
To make up for the shortfall, the government will issue government bonds worth ¥1.85 trillion, which will mark the first time in seven years that it goes ahead with additional bond issuance within a fiscal year.
Following the enactment of the extra budget, the Diet is expected to start deliberating on a record ¥97.45 trillion initial budget plan for fiscal 2017 as the government of Prime Minister Shinzo Abe is seeking its passage at an early date.
The initial budget includes social security expenses, accounting for more than a third of the country's total expenditures, and a fifth straight year of increased defense spending.