Japan has offered to lend up to $100 billion to an International Monetary Fund bailout kitty for extending assistance to nations reeling under the effects of the global financial crisis.
This will substantially increase the IMF's current funding capacity, which stands at around $250 billion.
The decision, announced by Japanese prime minister Taro Aso in the Asian edition of The Wall Street Journal, did not make any preconditions for making funds available.
"Japan is prepared to lend up to $100 billion to the Fund as an interim measure," he wrote.
The move comes as heads of states of the Group of 20 meet in Washington on Friday and Saturday to discuss ways of tackling the global financial crisis.
Aso will also present Japan's offer to the IMF at the G-20 meeting as part of its efforts to tackle the global crisis.
Japan, the world's second-largest economy, also has the second largest foreign exchange reserve at $1 trillion, against China's $2 trillion.
While Japanese companies are also smarting under the demand squeeze stemming from the global crisis, its financial institutions have by and large avoided the huge losses that western banks and finance companies have amassed.
Japan, which has been battling bad loans at its banks in the late 1990s and early 200s, is also better positioned to suggest remedies for the current financial crisis and the economic downturn.
Japan and India had earlier offered financial support to an IMF-sponsored bailout plan, but Tokyo had not figured out the amount it was willing to lend.
The IMF, which had, in recent times, dipped into its kitty to make funds available to Iceland, Hungary and Ukraine worth more than $30 billion, is also in talks with other countries like Pakistan for aid packages.
Lending to the IMF would also offer a channel for Japn's ballooning foreign exchange reserves.