Japan’s parliament on March 28 is poised to approve a record 114.38 trillion yen ($870 billion) budget for the fiscal year that begins next week, Report informs referring to Kyodo.

Japan has earmarked a record 6.82 trillion yen for the first year of a five-year period, intending to achieve a substantial boost in defense spending to cope with an increasingly assertive China, a nuclear-armed North Korea and a volatile Russia.

About a third of the 114 trillion-yen budget, or 36.89 trillion yen, will be used to cover social security costs, as Japan has one of the world’s fastest-aging populations. The government will issue around 35.62 trillion-yen worth of government bonds.

Separately, the Cabinet decided to use 2.2 trillion yen in reserve funds for the current business year ending Friday for a fresh inflation-relief package ahead of nationwide local elections.

Low-income households will receive cash handouts, while the government will reduce liquefied petroleum gas bills for households on top of electricity and city gas.

The Bank of Japan expects inflation will decelerate this year and undershoot its 2% target.