Japanese Prime Minister Sanae Takaichi insisted that a US$135 billion stimulus package approved on Friday was fiscally responsible and that she would reduce the country's large debt burden.

The 21.3 trillion yen outlay comes as the government looks to kickstart growth in the world's number-four economy as people grow worried about rising prices.

Takaichi said her government was being fiscally "responsible" in aiming to ease the pain of inflation through energy subsidies and tax cuts on households and firms.

"What Japan should do now is not to weaken its national strength through excessive austerity measures, but to strengthen its national power through proactive fiscal policies," she said in Tokyo.

"While fostering a strong economy and increasing the growth rate, we will reduce the government debt-to-GDP ratio, achieve fiscal sustainability and secure trust from the market."

Takaichi came to power last month with a pledge to fight inflation as anger over rising prices helped undo her predecessor, Shigeru Ishiba, who was in office barely a year.

But Takaichi's package has stoked fears about adding to Japan's already colossal debt pile, sending government bond yields to record highs and the yen lower against the dollar.

Japan's Finance Minister Satsuki Katayama on Friday dropped the strongest hit yet that the government may intervene to support the yen, saying it will take "appropriate action against disorderly [foreign exchange] moves". (AFP)