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TOKYO : The Japanese government plans to restart the buying of shares held by banks as part of fresh measures to stabilise Japan's financial markets, news reports said Saturday.
Under the plan, Banks' Shareholdings Purchase Corp. will resume buying stocks unloaded by banks in a bid to support ailing managements, the Nikkei business daily and Kyodo News said.
The government-run body was set up in January 2002 during a financial crisis and continued operation through 2006, at which point its holdings were valued at around 1.6 trillion yen (17.6 billion dollars).
The government has also decided to ask the Bank of Japan to start buying shares from banks, while considering expanding a two trillion yen limit for its bank recapitalisation programme, the daily said.
In addition to those steps, Tokyo will introduce stricter regulations for stock trading, set more flexible fair value accounting rules and revise the capital ratio requirements for banks.
Prime Minister Taro Aso's government plans to announce the emergency measures as early as the beginning of next week, it said.
The government already announced a first step of market stabilisation measures in mid-October, including easing the stock buyback rules and temporarily suspending sales of government-held shareholdings.
By presenting an array of policy measures and highlighting its willingness to tap all available resources, the government seeks to alleviate mounting concerns about the stock market and financial institutions.
- AFP/vm
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