Japanese and U.S. government officials are preparing to hammer out terms of a new agreement that would set how much Japan spends on supporting U.S. forces.

The so-called “sympathy budget” includes construction projects on U.S. military bases, utility costs, master labor contract employees and range relocation expenses, according to U.S. Forces Japan spokesman Col. Victor Warzinski.

Warzinski said it’s a shared cost that’s part of the “Japanese contribution to supporting stationing of U.S. forces in Japan.”

The five-year special-measures agreement expires in March 2006. The Japan Times reported this week that Japanese government officials would seek to reduce Japan’s contribution, but a Ministry of Foreign Affairs spokeswoman on Wednesday denied the report, maintaining that while the government plans to discuss the budget, it has not decided its strategy yet.

Warzinski said he didn’t know if Japan would seek to reduce its cost-share of U.S. troops.

“Those discussions have yet to get under way in earnest,” he said Wednesday, noting those would involve not only USFJ, but representatives from the U.S. Embassy, State and Defense departments, as well as their Japanese government counterparts. “It would be premature to predict any other outcomes. It’s obviously something U.S. Forces Japan will be working very diligently on over the next several months.”

The issue could arise as early as Saturday, when top U.S. and Japanese defense and foreign ministry officials are expected to meet in Washington, D.C., for “two plus two” talks.

“It may be a topic of discussion then,” Warzinski said.

The security meeting provides a forum to discuss “issues of mutual concern,” Warzinski said, such as “global posturing, the North Korea nuclear issue and other issues significant to U.S.-Japan relations.”

Hana Kusumoto contributed to this story.