Japan is making final arrangements to earmark a record defense budget of ¥7.7 trillion ($54 billion) for fiscal 2024 as part of an intense arms buildup plan amid the severe regional security environment, government sources said Saturday.

The figure — far exceeding the previous high of ¥6.8 trillion in the initial budget for the current fiscal year through March — includes outlays for domestic long-range missiles as part of a government plan to acquire capabilities to strike enemy territory.

But work to compile the budget is continuing without a decision on the timing of tax hikes to fund the government pledge to substantially increase the defense budget. The country's draft budget for the next fiscal year is expected to be approved at a Cabinet meeting Friday.