Japan is reportedly set to effectively ban government purchases of telecommunications products from China's Huawei and ZTE over fears of intelligence leaks and cyber attacks.
The government is expected to revise its internal rules on procurement as early as Monday, the Yomiuri newspaper reported on Friday.
Japan is unlikely to name the two companies, to avoid aggravating China, but Huawei and ZTE are to be subject to the ban, the report said, citing a government source.
The report follows a decision by the United States this year to ban government purchases of Huawei gear.
US intelligence agencies allege Huawei is linked to China's government and that its equipment could contain "backdoors" for use by spies, although no evidence has been produced publicly and the firm has denied such claims.
In addition, Australia and New Zealand have blocked Huawei from building 5G networks, while Britain's BT Group said on Wednesday it was removing Huawei's equipment from the core of its existing 3G and 4G mobile operations and would not use the Chinese company in central parts of the next network.
This week, Huawei CFO and deputy chair Wanzhou Meng was arrested in Vancouver airport in Canada.
Meng is also the daughter of Huawei founder Ren Zhengfei and is now facing extradition to the United States following a scheduled bail hearing on Friday.
In a statement, Huawei said it has no knowledge of any wrongdoing by Meng.
"The company has been provided very little information regarding the charges, and is not aware of any wrongdoing by Ms Meng. The company believes the Canadian and US legal systems will ultimately reach a just conclusion," Huawei said.
"Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US, and EU."
Canadian Prime Minister Justin Trudeau has denied any involvement in the arrest.
"The appropriate authorities took the decisions in this case without any political involvement or interference," Trudeau told media in Montreal on Thursday.
"We were advised by them with a few days' notice that this was in the works."
NPR is reporting that US national security adviser John Bolton said that he knew of the arrest in advance.
"I knew in advance, but this is something that's, that we get from the Justice Department and these kinds of things happen with some frequency. We certainly don't inform the president on every one of them," Bolton told NPR.
The arrest is said to be concerning Huawei violating US trade sanctions on Iran.
In March 2017, ZTE pleaded guilty to violating US trade sanctions on sales to Iran and agreed to pay up to $1.2 billion in penalties to settle the case.
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