Banknotes of Japanese yen are seen in this illustration picture taken September 22, 2022. REUTERS/Florence Lo/Illustration

By Leika Kihara

TOKYO (Reuters) -Japan is considering spending around 17 trillion yen ($110 billion) in new Prime Minister Sanae Takaichi's first stimulus package, the Nikkei newspaper reported on Saturday, underscoring the administration's focus on expansionary fiscal policy.

A supplementary budget to fund the package will likely be sized around 14 trillion yen, exceeding that of the previous year, the paper said, a move that may add to Japan's already huge public debt.

Since taking office in October, Takaichi has pledged to compile a sizeable package of spending measures to cushion the economic blow from rising living costs, and boost investment in growth areas such as artificial intelligence and semiconductors.

The size of the package, which is being worked out by the Ministry of Finance, could change depending on upcoming negotiations among ruling parties, the Nikkei said.

The package will include bigger exemptions on income tax, tax cuts on gasoline, subsidies to slash utility bills and funds appropriated to prefectures for spending on food aid, it said.

The government was not immediately available to comment.

The administration is expected to finalize the package with approval by the cabinet on November 21.

($1 = 154.53 yen)

(Reporting by Leika Kihara; Editing by Leslie Adler)