The Finance Ministry on Wednesday said it will allocate 10.1 billion yen in the fiscal 2005 budget to build a ship for gas exploration in the East China Sea, where Japan and China are embroiled in an energy dispute.
The move is widely seen as retaliation against what Japan says are China's attempts to secure gas from Japanese waters.
"Japan doesn't have a single ship equipped to conduct precise measurements of the resources asleep under its vast waters, and has to borrow ships from other countries, which takes time," trade minister Shoichi Nakagawa said after a 10-minute final negotiation with Finance Minister Sadakazu Tanigaki.
China is exploring for gas just within its side of what Tokyo claims is the line separating the two countries' exclusive economic zones, but is capable of tapping into gas deposits that extend into Japan's side, according to Japan. China says its waters go much further along its continental shelf.
The two countries have agreed to resolve the dispute through talks. Officials at the Ministry of Economy, Trade and Industry said they hope that using the ship, scheduled to begin in fiscal 2008, will lead to more concrete dialogue between the countries.
The funds will be newly allocated within the 82.18 yen budget that the Finance Ministry first drafted Monday.
None of the funds for building the ship were originally approved. The draft budget already includes 12.93 billion yen for research into Japan's natural gas reserves, up 240.3 percent from the previous year.
Some Japanese businesses are concerned that the months-old dispute will dampen their chances of securing state contracts in China.