TOKYO, March 2 Reuters Japans powerful lower house on Tuesday passed a record 1 trillion budget for the coming financial year, and lawmakers are already debating further stimulus to cope with the economic fallout from the coronavirus pandemic.

Like many other nations, Japan has spent heavily to counter the pandemic. The budget for the year beginning in April contains 5 trillion yen 47 billion in such emergency reserves and that comes on top of three pandemicspecific economic packages, worth a combined 3 trillion, equivalent to 60 of Japans GDP.

The budget also reached record levels due to increases in social security spending to support its rapidly ageing population as well as record defence spending to counter threats from North Korea and China.

But Japan has the industrial worlds heaviest debt burden and analysts warn further stimulus may cause spikes in Japanese bond yields and government borrowing costs that have so far been kept low due to massive money printing from the central bank.

Japans fiscal situation is already very severe. Its bond market could come under attack from investors if the lack of fiscal discipline gets out of hand, said Kazumasa Oguro, economics professor at Hosei University.

The worlds thirdlargest economy is on the cusp of another slump in the current quarter due to a second state of emergency imposed this year. It has recently been lifted for many prefectures and is due to be lifted for Tokyo and its surrounding areas from early March….