The government plans to earmark ¥3.2 trillion in spending under a planned supplementary budget for fiscal 2019, which ends in March, sources said Thursday.
The government is expected to adopt the extra budget on Friday.
The extra budget will cover some 20 percent of the ¥13.2 trillion in fiscal spending included in the government’s ¥26 trillion economic stimulus package adopted on Dec. 5.
Under the extra budget, the government plans to spend ¥2.3 trillion on measures to enhance its disaster prevention capabilities, including by dredging rivers and strengthening levees.
The government plans to use ¥900 billion on measures to mitigate the impact on small and midsize companies and farmers of the U.S.-China trade war and the Japan-U.S. trade agreement.
To support the economy after the 2020 Olympics and Paralympics, ¥1.1 trillion will be set aside under the extra budget.
The extra budget will also include a reduction in tax grants to local governments.
The government plans to issue deficit-covering bonds in the middle of a fiscal year for the first time in three years as its fiscal 2019 tax revenue is seen falling short of the target level.