Prime Minister Shinzo Abe's Cabinet on Thursday approved a package of stimulus measures worth 26 trillion yen ($239 billion) as it seeks to shield the Japanese economy from weak overseas demand, the fallout from a recent consumption tax hike and the risk of a slowdown after next summer's Tokyo Olympics.

The first stimulus package in three years entails fiscal spending of 13.2 trillion yen by Japan, already saddled with piles of public debt.

With the spending, called a "15-month budget," which will spread over the remaining three months of this fiscal year through March and the next fiscal year, the steps include building infrastructure following a series of devastating natural disasters and promoting cashless payments in the country.

The government expects the stimulus package, part of which will be financed by the private sector, to push up the country's gross domestic product by around 1.4 percent in real terms.

"As future risks to the economy arising from overseas economies are coming into sight, we will take every possible pre-emptive measure," Abe said in a meeting attended by Cabinet members and business leaders, prior to the endorsement of the stimulus package.

Japan posted the lowest quarterly economic growth in a year in the July-September period with a 0.2 percent rise on an annualized basis, as the slowdown in the Chinese economy amid the trade spat with the United States dented exports.

The world's third-largest economy is now threatened by the consumption tax hike to 10 percent from 8 percent on Oct. 1, while facing other downside risks abroad, including impact of the United Kingdom's planned exit from the European Union and tensions in the Middle East.

As part of efforts to spur consumer spending, the government has launched a program to give rebates for cashless payments at small shops from October through June next year, for which it will set aside about 280 billion yen.

This will be followed by another program, under which the government is considering providing 5,000 yen worth of points to spend at stores across Japan to consumers who load 20,000 yen in their account for smartphone payments, starting in September next year.

Out of the fiscal spending, nearly half will be used for reconstruction from disasters, including those caused by typhoons Faxai in September and Hagibis in October and strengthening infrastructure to reduce disaster damage.

The stimulus package will help "ease the pain to some extent...and keep consumption from stalling," said Shunsuke Kobayashi, a senior economist at Daiwa Institute of Research.

But it will not be effective enough to boost personal spending, he said, adding that that the tax increase is expected to slash Japan's GDP by 0.4 percentage point.

The package, compared to 28.1 trillion yen in previous stimulus in 2016, will be financed by an extra budget for the current fiscal year through March and the fiscal 2020 budget, both of which will be drafted this month.

Some economists argue that massive spending could crimp efforts such as the recent consumption tax hike to improve Japan's fiscal health, the worst among major industrialized economies.

The package also aims to improve labor conditions, support small companies and promote advanced technology development.

The government will increase job training services to help people in their 30s and 40s, the generations severely affected by Japan's deflation-hit economy from the late 1990s, land new jobs.

Subsidies will be provided to small and medium-sized companies to spur their capital spending and more computers will be supplied to public schools.

More support will be given to companies in developing wireless technologies that will follow 5G networks and farmers who try to sell their products abroad.