The gridlock in the Diet threatens to curtail the government's ability to apply fiscal stimulus as the economic rebound falters.
Opposition parties in the Upper House stymied legislation approved by the Lower House on Aug. 28 that would enable the issuance of ¥38.3 trillion in deficit-financing bonds, seeking to force Prime Minister Yoshihiko Noda into an early election.
The government could hit a spending ceiling as soon as October, according to the Finance Ministry.