The Financial Services Agency decided Thursday to reduce compulsory automobile liability insurance premiums from April.
The move reflects the improved finances of the insurance program as wider use of vehicle safety devices such as automatic braking systems contribute to a decline in the number of traffic accidents.
The Compulsory Automobile Liability Insurance Council, which advises the Financial Services Agency, will discuss the premium reduction of around 16 percent. The government aims to make a final decision by the end of the month, the sources said.
The insurance helps cover damages from traffic accidents resulting in death or injury. Premiums were last cut in April 2017.
Currently, a two-year contract has a premium of ¥25,830, excluding Okinawa Prefecture and remote islands. A 16 percent cut will reduce the premium by some ¥4,000.