TOKYO, Dec. 20 (Xinhua) -- The cabinet of Japanese Prime Minister Yoshihiko Noda on Tuesday approved a 2.53 trillion yen (about 32.4 billion U.S. dollars) draft fourth supplementary budget, with allocations made to boost the auto industry suffering under the weight of a strong yen, as well as to aid smaller firms battling the yen and reeling after recent floods in Thailand.
In a bid to address the nation's own mounting debt, government officials said that the extra budget will not be financed through the issuance of new government bonds.
Finance minister Jun Azumi said in recent news conferences that the government must cap bond issuance as the nation struggles to reverse its fiscal predicament, which is currently the worst in the industrialized world.
300 billion yen has been allocated to reintroduce a one-year subsidy program aimed at encouraging consumers to purchase environmentally-friendly vehicles and buoy Japan's auto sector, which is highly susceptible to yen-euro-dollar currency moves, officials said.
Exporters like Tokyo, Honda and Nissan rely on a weal yen against its major counterparts to boost their competitiveness in global markets and to ensure profits made abroad aren't eroded when repatriated due to unfavorable currency exchanges.
The recent floods in Thailand also battered Japan's key auto sector, with many manufacturers there forced to shutter operations and battle with severe supply chain disruptions.
On the domestic front, due to the yen's rise to record highs this year, some manufactures have opted to move operations out of Japan to more economically viable manufacturing hubs, causing the Japanese premier and his finance minister to pledge more proactive steps to avoid a "hollowing" out of Japan's economy.
The current fourth supplementary budget marks the first time since 1947 that the Japanese government has drafted a fourth budget and the draft also includes provisions to protect Japan's fragile agriculture sector that may be in jeopardy as the nation closes in on inking Trans-Pacific Partnership deals with other member economies, meaning, in theory, high tariffs on rice could be wiped out.
Among other policy measures, government officials also inferred that the budget's scope will also extend to boost social security support in regional economies.