Japan's Cabinet OK's $1 trillion budget for fiscal 2013, hiking public works, defense spending

Japan's Cabinet has endorsed a record-high 92.6 trillion yen ($1.02 trillion) general budget for the coming fiscal year aimed at boosting growth through more public works spending while raising defense outlays to counter rising tensions with China.

The 4.75 trillion yen ($52.5 billion) in proposed defense spending, up 0.8 percent from last year, is the first such increase in 11 years and is partly aimed at beefing up Japan's coastal and marine surveillance around islands also claimed by China and Taiwan.

Nearly half of the 2013 budget approved Tuesday will be financed using new deficit bonds, further increasing the public debt, which already is the world's highest at more than twice the size of the economy.

The Cabinet is due to submit the proposed budget to the legislature next month.