TOKYO, NOV. 18 -- The government has decided to bar foreign construction companies from participating in Japanese public works projects, according to Japanese media reports.

Prime Minister Noboru Takeshita will tell U.S. Commerce Secretary C. William Verity of the decision when they meet Thursday, Japanese media quoted unidentified government sources as saying today.

Verity is making his first overseas trip since being sworn in last month.

Although the reported ban would affect all foreign firms, the move has caused particular tension between Japan and the United States.

It would not affect work on the new Kansai International Airport, in which the private sector has taken the lead. U.S. firms have won $2.24 billion worth of contracts for the project.

Verity's visit comes at a time of renewed tension in U.S.-Japan trade relations following Washington's recent determination that Japanese companies are selling color television sets below fair market price in the United States.

Washington's trade deficit with Japan last year was a record $58.6 billion.

Verity has criticized the Japanese for not raising prices to compensate for the yen's rise against the dollar.

"By failing to price in line with the appreciated yen ... Japanese firms are impeding the power of currency adjustments to help correct our trade imbalance," he said.

{In a related development, Dow Jones reported that a senior U.S. trade official said the United States has rejected Japanese offers for a partial easing of import restrictions on processed foods.

{"We have turned them down," Deputy U.S. Trade Representative Michael Smith told the news service. The Japanese government is still seeking a compromise, Dow Jones reported.