The ruling Liberal Democratic Party on Thursday approved a bill to allow private businesses to own mineral and other samples collected outside Earth.
The LDP will consult with the main opposition Constitutional Democratic Party of Japan and others, with a view to submitting the bill during the ongoing Diet session.
The bill calls for allowing space resources to be owned by those who collected them, based on exploration plans submitted in advance to the prime minister.
Amid growing competition in the field of space development, the Japanese bill is designed to encourage domestic companies to enter the field.
Laws to allow such ownership have been already established in the United States, Luxembourg and the United Arab Emirates, according to sources familiar with the matter.
Nonetheless, there are no international rules on rights related to space resources at the moment, discouraging private businesses from engaging in space development, they said.
"By preparing a domestic law first, we aim for Japan to lead talks to create international rules," LDP lawmaker Takayuki Kobayashi, who was involved in drawing up the bill, told reporters.
Last month, Japan joined a U.S.-led international agreement that outlines the exploration and utilization of resources in space.
The Artemis Accords proposed by the National Aeronautics and Space Administration seek to establish a set of principles for space exploration including lunar resource extraction. China and Russia are not members of the framework.
The agreement also covers issues regarding space debris and stipulates that its members, including Australia, Canada, Italy and the United Kingdom, will not interfere with their counterparts' endeavors on the Moon.
Some countries have set their sights on water ice at the Moon's poles for the creation of hydrogen fuel.
A different international framework, the Outer Space Treaty, has been ratified by over 100 countries but does not set rules on resource extraction, while the United Nations' so-called Moon Agreement bars individuals and businesses from claiming possession of celestial bodies but has not been ratified by leading spacefaring countries such as the United States, Russia, China and Japan.
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