Japan's budget demands hit a record for the next fiscal year, exceeding $800 billion, the finance ministry said on Wednesday, as the world's No. 4 economy struggles to slow spending and as debt-servicing costs rise.

A new leadership race could complicate Tokyo's efforts to restore fiscal discipline as voting this month for the ruling party's new leader, and by extension the next prime minister, risks triggering a snap parliament election.

The record ¥117.6 trillion ($811.93 billion) budget requests come as the Bank of Japan shifts away from its decadelong stimulus program.