FILE PHOTO: Japan's new Prime Minister Sanae Takaichi delivers her first policy speech in parliament, in Tokyo, Japan, October 24, 2025. REUTERS/Kim Kyung-Hoon/File Photo

TOKYO (Reuters) -A Japan ruling-party panel consisting of lawmakers close to Prime Minister Sanae Takaichi proposed on Tuesday compiling a supplementary budget exceeding 25 trillion yen ($161 billion) to fund the premier's planned stimulus package.

The proposed amount, which would be much larger than the previous year's extra budget of 13.9 trillion yen, underscores growing calls among politicians to ramp up spending to cushion the blow to households from rising living costs.

The government "should not hesitate to issue more bonds" to fund investment in growth areas and crisis management, the proposal, which was made public, said.

The panel, comprising Liberal Democratic Party lawmakers who advocate an expansionary fiscal policy, presented the proposal in a meeting with Takaichi on Tuesday.

Economic revitalisation minister Minoru Kiuchi, who is among the close associates of Takaichi, serves as an adviser to the panel.

Since taking office last month, Takaichi has pledged to compile a big spending package to mitigate households' pain from rising living costs and boost investment.

While the administration has refrained from specifying the size, some of Takaichi's advisers have signaled the chance of big spending that could warrant additional debt issuance.

Prospects of a bigger-than-anticipated spending package from Takaichi have pushed super-long Japanese government bond (JGB) yields to record highs.

($1 = 154.9900 yen)

(Reporting by Yoshifumi Takemoto and Leika Kihara; Editing by Muralikumar Anantharaman)