Japan's parliament on Monday enacted a state budget for the next fiscal year after a rare upper house revision reflecting Prime Minister Shigeru Ishiba's decision to reverse course on a planned hike in medical costs, handing a hard-won victory to the minority government with less than a day remaining in the current fiscal year.

It is the first time under the country's current Constitution that a budget has been enacted after a revision was approved by the House of Councillors and then the House of Representatives. The total size of the fiscal 2025 budget came to a record 115.20 trillion yen.

Although the ruling Liberal Democratic Party-Komeito party coalition lost its majority in the powerful lower house in last year's election, the opposition Japan Innovation Party backed the revision, ensuring the budget's passage.

Lower house decisions on key matters such as budgets take precedence over those of the upper house. When a draft budget plan submitted by the government clears the lower house, it usually means the enactment of that budget is guaranteed.

The budget enactment should come as a relief to Ishiba as public support rates for his Cabinet hit new lows due to revelations that he handed out gift vouchers worth 100,000 yen each to rookie LDP lower house members in early March.

This brought questions from the public about whether such gift-giving has been a long-held practice among LDP prime ministers, putting further pressure on the ruling party, which is already attempting to paper over a damaging slush fund scandal before the upcoming upper house election this summer.

Faced with navigating minority rule, Ishiba has underlined the importance of listening to demands from opposition parties and incorporating them into policy whenever possible, given the ruling coalition needs their support to pass bills and budgets in the lower house.

Soon after the lower house approved the fiscal budget plan with opposition amendments in early March, Ishiba abruptly shelved a plan to raise medical costs following resistance from opposition lawmakers and patients. The about-face necessitated another change to the budget.

In negotiations to get the budget through the lower house the first time, the ruling camp agreed to accept a request from the Japan Innovation Party to expand subsidies to make high school education tuition free. It also agreed to a Democratic Party for the People demand that the income threshold for tax payments be raised.

The decision to scrap the increase in medical costs was demanded by the main opposition Constitutional Democratic Party of Japan.

About a third of the fiscal 2025 budget will go to social security spending. Japan also plans to spend a record 8.7 trillion yen on defense in the face of growing security threats from its neighbors China and North Korea.

The budget also includes steps to mitigate the pain of rising prices, measures that the government believes are necessary despite Japan seeing its strongest wage growth in decades.

When Ishiba's remarks underscoring the need for "powerful" inflation-relief steps were revealed last week by the head of Komeito, some opposition lawmakers expressed concern he was hinting at the need for further spending to address cost of living pressures. Ishiba, however, assured them that he was not implying further budgetary measures will be needed.

Even after the budget is passed, Ishiba will continue to face challenges as opposition parties are expected to pressure him and the LDP over the acceptance of corporate donations. The party has yet to shake the issue that came to light when the LDP's underreporting of political funds was revealed.

The parties are divided over whether to strengthen regulations or to ban such donations outright.