The head of Japan's junior coalition party said Friday that he does not rule out any options to help households weather the impact of rising prices and higher U.S. tariffs, including a possible cut to the country's politically sensitive consumption tax.

Komeito chief Tetsuo Saito, who has supported cash handouts as a "stopgap" measure to ease the pain for households, also said the issuance of deficit-covering government bonds could be considered to secure emergency funding.

Prime Minister Shigeru Ishiba, who has vowed to deploy all possible means to address what he calls a "national crisis," is expected to instruct his ministers next week to compile a supplementary budget for fiscal 2025, in time for this summer's House of Councillors election, sources familiar with the matter said.

The budget would fund a series of relief measures, such as subsidies to lower utility bills and to encourage purchases of electric vehicles and other eco-friendly cars, the sources said.

Ishiba's instruction would come quickly on the heels of the initial budget for the fiscal year starting in April clearing parliament on March 31.

"The crisis stemming from the (U.S.) tariffs will impact the whole economy. We are considering all possible options," Komeito's Saito said at a press conference, indicating that cutting consumption or income tax is not ruled out.

U.S. President Donald Trump's imposition of higher import tariffs has clouded the economic outlook for Japan, with the United States ranking as its top export market.

Households in Japan are also grappling with rising prices for everyday goods including rice, as wage growth is offset by inflation.

Calls are growing within the ruling Liberal Democratic Party and Komeito for extending more support to ordinary people, with a plan being floated to distribute cash handouts of between 30,000 yen and 50,000 yen to all residents to help them ride out the current economic headwinds.

But the LDP, headed by Ishiba, is seen as hesitant to join Saito in reducing the consumption tax, given that the revenue is used to cover ballooning social security costs.

LDP Secretary General Hiroshi Moriyama said the push for a tax cut should be accompanied by debate on how to make up for the resulting revenue shortfall.

Changing the consumption tax rate is a sensitive issue after past hikes proved unpopular. Still, the current 10 percent is about half the level of rates imposed by major European nations.

After losing its majority in the powerful House of Representatives in a general election last October, the ruling camp needs to take heed of demands from the opposition camp.

Yuichiro Tamaki, who heads the Democratic Party for the People, asked the government on Thursday to cut the consumption tax as a temporary measure and draw up a supplementary budget for the current fiscal year to fund inflation and tariff-relief measures.