Japan and the United States are poised to agree on measures to keep upper limits intact when they renew a treaty on host-nation financial support for U.S. military facilities in Japan, Japanese government sources said Sunday.

The measures are designed to keep Japan's financial obligations almost unchanged, departing from the cost-setting method that led to higher burdens when the treaty was renewed twice in the past, the sources said.

They would address U.S. objections to reductions in host-nation support and calls by Japanese lawmakers for outlays to be scaled back after the current treaty expires next March.

The sources said the two countries are also working on an agreement to set up a "coordination mechanism" to decide and implement nonmilitary cooperation, such as medical services and transportation of goods, in the event of an attack on Japan or an emergency in "areas surrounding Japan."

Prime Minister Yoshiro Mori and U.S. President Bill Clinton are expected to agree in principle on the two issues when they hold talks in Tokyo on the eve of the July 21-23 Group of Eight summit in Okinawa Prefecture, the sources said.

The two nations will then officially agree on a new host-nation treaty and the defense mechanism when they hold a so-called "two-plus-two" meeting of defense and foreign ministers in the autumn.

Tokyo and Washington have been negotiating renewal of the Special Measures Agreement, which stipulates that Japan will cover all yen-based costs incurred by U.S. forces in Japan for labor, utilities and relocation of training facilities.

The planned upper-limit measures include fixing the number of yen-paid civilian workers and setting energy-saving targets for utilities.

The Special Measures Agreement does not spell out the amount of Japan's financial obligations, but the past method of revising upper limits in advance has led to a ballooning of the burdens.

The two countries adopted the highest annual costs over the prior three years as the upper limits for yen-paid civilian workers and utilities when they renewed the agreement in the past.

The current treaty puts the labor ceiling at 23,055 workers. The U.S. forces, which now have 24,500 workers, currently cover any costs that exceed the upper limit.

Japan would have to cover the costs of 24,500 workers if the previous method is adopted again in a new treaty.

Host-nation support began in fiscal 1978, when the U.S. economy was foundering and Japan's cost of living had skyrocketed amid robust economic growth. The support was dubbed a "sympathy" budget in Japan.

To give the support a legal framework, the agreement was drawn up by the two countries in 1987. It has been renewed twice, in 1991 and 1996.

In fiscal 2000, which started April 1, Japan earmarked 121.1 billion yen for labor costs, 29.7 billion yen for utilities and 300 million yen for training relocation.

Japan also pays other costs under the bilateral Status of Forces Agreement, earmarking 124.1 billion yen for housing, environmental preservation and labor welfare.