Japan should deploy expansive fiscal stimulus "without hesitation" next year if overseas economies pose downside risks to growth, a draft of the government's annual economic policy road map showed on Tuesday.
The government is expected to finalize by the middle of the month the policy road map, which is used to compile the budget for next fiscal year.
Prime Minister Shinzo Abe's government already has plans to roll out tax breaks, shopping vouchers and public works spending to offset the blow expected from a nationwide sales tax increase scheduled for October.
Opening the door to even more stimulus spending next year highlights policymakers' concerns that trade protectionism will continue to weigh on the global economy for some time, requiring additional measures to prop up growth.
The draft of the annual policy blueprint made no mention of delaying the sales tax hike, to 10% from 8%, but some ruling party lawmakers and advisers are urging the government to scrap the plan.
Japan needs the extra tax revenue to pay for rising welfare costs, but a bruising trade war between the United States and China has shaken policymakers' confidence in the Japanese economy.
The draft, which comes days before a Group of 20 meeting of finance ministers and central bankers in Japan on the weekend, also called on the group to take pre-emptive measures against economic crises.