The government will draw up a fiscal 2017 supplementary budget for additional spending of some ¥2 trillion, including for setting up nursery facilities to accept 320,000 children on waiting lists ahead of schedule as pledged by the ruling coalition in the Oct. 22 general election.

To compile the extra budget for the year ending next March, the government aims to tap into about ¥200 billion in fiscal 2016 budget surplus, and some ¥1 trillion in funds for debt-servicing that were not used as a result of the Bank of Japan’s introduction of a negative interest rate in February last year, sources said.

But because there will still be a revenue shortfall, the government plans to issue new construction bonds worth hundreds of billions of yen, the sources said, adding that no deficit-covering bonds will be newly placed.

The planned supplementary budget will also fund disaster prevention and post-disaster reconstruction projects, as well as measures to assist the domestic primary industry following a broad free trade accord reached between Japan and the European Union earlier this year.