Gov't to draft 5 tril. yen extra budget for fresh stimulus: sources+

TOKYO, Oct. 1 Kyodo - The government is set to draw up an extra budget for fiscal 2010 worth nearly 5 trillion yen to fund an additional stimulus package aimed at fighting the impact of the recent sharp rise of the yen and boosting Japan's economic
recovery, sources close to the matter said Friday.

Prime Minister Naoto Kan is hoping to get the draft budget for the year through
March approved by the Diet during an extraordinary session that opened earlier
in the day. But it is possible that opposition parties will attempt to block
the bill using their dominance in the House of Councillors.
Kan said earlier he would refrain from issuing any new government bonds to fund
the supplementary budget as part of his efforts to restore Japan's fiscal
health, the worst among major developed countries.
The government could instead use such resources as tax revenues, surpluses
carried over from the fiscal 2009 budget and funds available due to
lower-than-expected interest payment on its debt.
The budget would involve some 4.8 trillion yen in outlays for the planned
additional stimulus package, which the sources said would center on introducing
public works projects to underpin the economy and create jobs.
The government and the ruling coalition, led by Kan's Democratic Party of
Japan, will explain the outline of the budget to opposition parties on Monday
and seek their understanding and cooperation.
==Kyodo