Japan May Buy Stocks to Rescue Tanking Market

Government prepares to act as indexes hit 26-year low
By Jason Farago,  Newser Staff
Posted Feb 24, 2009 9:36 AM CST
Japan May Buy Stocks to Rescue Tanking Market
Japanese shares tumbled early Tuesday after a brutal session on Wall Street overnight, but the sell-off eased as the government signaled it may move to prop up stock prices.   (AP Photo/Katsumi Kasahara)

The Japanese government said today that it might intervene to prop up the stock market, as the country's two main indexes approached their lowest levels in 26 years. The continued decline of the Nikkei and Topix—down 18% this year alone—has endangered Japan's banks, which hold a substantial amount of stock as capital, reports the Financial Times.

One powerful business lobby is pushing the government to buy shares in the market to buoy its performance, a solution the finance minister is reported to be considering. “It is undesirable for share prices to fall, causing unnecessary consequences,” he said. “I discussed with government staff last Friday what we could do generally to deal with falling share prices.”
(More Japan stories.)

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