Assistance will include loans through government-backed financial institutions to promote cooperation among private Japanese and Chinese firms working on projects in third-party countries, it said.

Cooperation will centre on the environmental sector, industrial modernization and logistics, according to guidelines compiled by the government, the Japanese business daily said.

The Japanese government plans to cooperate with China on its Belt and Road initiative by financially supporting private-sector partnerships, as Tokyo seeks to improve bilateral ties with its Asian neighbour, the Nikkei reported on Wednesday.

Chinese President Xi Jinping's Belt and Road initiative is an extensive infrastructure plan that will link Asia with the Middle East and Europe, although critics say it is more about spreading Chinese influence.

Japan has taken a cautious stance but has recently shown signs of warming to the initiative.

Kyodo News quoted Prime Minister Shinzo Abe as telling a gathering of Japanese and Chinese business executives this week that he believed "Japan will be able to cooperate well with China."

Abe met Xi on the sidelines of an Asia Pacific Economic Cooperation summit last month and said the two had made a "fresh start" to relations between the two nations, which have been plagued by a long-running territorial dispute over a cluster of East China Sea islets.

The Japanese premier has proposed visiting China at an appropriate time, which would then be followed by a visit by Xi to Japan.