Japan's cabinet on Friday approved a draft 18.3 trillion yen ($117 billion) supplementary budget for this fiscal year to fund a massive economic package under Prime Minister Sanae Takaichi, who is aiming to spur growth with expansionary spending.

Takaichi's government hopes to secure parliamentary approval for the fiscal 2025 supplementary budget, which is far larger than last year's 13.9 trillion yen package, during the ongoing extraordinary session through Dec. 17 with backing from opposition parties.

But it remains uncertain whether Takaichi can get the opposition bloc to back her plan, as her fiscal dovishness has sparked concerns about the outlook for Japan's already poor fiscal health, recently sending long-term yields to the highest levels in 17 years.

With the government planning to raise 11.7 trillion yen through new bond issuances to fund measures designed to alleviate rising living costs and encourage investment, the extra budget underscores Takaichi's willingness to rely on debt to finance spending.

Following the cabinet's approval, Finance Minister Satsuki Katayama told reporters that the government has been "sufficiently mindful" of the sustainability of its finances.

"We will work to secure fiscal sustainability and maintain market trust by lowering the government's debt-to-GDP ratio," Katayama, a former Finance Ministry bureaucrat, said.

Last week, the Takaichi administration finalized a 21.3 trillion yen stimulus package featuring relief items such as subsidies for electricity and gas bills and cash handouts for households with children, amid persistent inflation.

The government decided to boost investment, particularly in the semiconductor and shipbuilding sectors, which Takaichi views as vital to national security, to pursue a "strong economy" under her slogan of "responsible and proactive public finances."

The budget also set aside 3.4 billion yen for bear-related programs, with a national population survey and the hiring of licensed experts as "government hunters" forming the core of the initiative, making it the largest budget allocation ever devoted to the problem.

The Defense Ministry allocated 847.2 billion yen, a record for an extra budget. Combined with defense-related spending in the fiscal 2025 initial budget, the total is set to meet the government's target of bringing it to 2 percent of gross domestic product.

In financial markets, mounting fears about the impact of Takaichi's policies on Japan's fiscal health -- the worst among Group of Seven economies -- have pushed up long-term interest rates.

The debt-sale plan, mapped out after Takaichi took office on Oct. 21, is nearly double the size of last fiscal year's supplementary budget.

Takaichi has emphasized the importance of "wise spending." The total amount of government bond issuance for this fiscal year, combining the initial and extra budgets, will come to 40.3 trillion yen, below 42.1 trillion yen in fiscal 2024.

Critics, however, note that this was only made possible by the decision of her predecessor, Shigeru Ishiba, to curb new bond sales when his administration compiled the fiscal 2025 initial budget.

Supported by higher income tax revenue on the back of recent wage hikes, the government's receipts for this fiscal year are expected to be 2.9 trillion yen above the initial estimate. The additional amount will be incorporated into the supplementary budget.

Earlier Friday, meanwhile, parliament enacted a law to end the provisional gasoline tax surcharge at the end of this year, believing the reduction will push energy prices down, ease the burden on households, and cut transport and other industry costs.

The government has yet to determine how to offset the resulting loss of revenue, including from the planned abolition of a similar diesel tax in April, estimated to reduce annual tax revenue for the central and local governments by about 1.5 trillion yen.