Japan's government plans additional spending of 13 trillion yen ($165 billion) for reconstruction projects after the March 11 earthquake and tsunami, on top of a combined 6 trillion yen already set aside in two extra budgets, a government source said on Thursday.
Investors are counting on reconstruction spending to help the world's third-largest economy pull out from a slump caused by the disasters and to resume moderate growth in the third quarter.
To raise the money, the government is considering issuing special bonds, scaling back other spending plans and selling national assets, said the source, who declined to be identified. Assets the government could considering selling include shareholdings in NTT, Japan's largest phone company, and Japan Tobacco, the nation's largest cigarette maker, the Nikkei business daily said.
The government has yet to finalise the maturities for reconstruction bonds it will issue but the Ministry of Finance is planning on five-year bonds, while the government will consider raising taxes to repay them, the source said.
The markets had expected fresh spending beyond the first two extra budgets to exceed 10 trillion yen.
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