Tokyo, March 13 (Bloomberg) -- Prime Minister Junichiro Koizumi said Japan's Financial Services Agency will today detail steps to prevent a ``financial crisis'' after the Nikkei 225 stock average this week slumped to a 20-year low. The agency will make it easier for companies to buy back shares and to limit short sales, the borrowing of equities to sell them, an agency official said. The ruling party also proposed giving banks two more years to pare $180 billion of shareholdings and increasing government-backed buying of those shares. Falling share prices and bad loans that stood at more than 52.4 trillion yen ($447 billion) last March are threatening to erode the capital banks need to stay in business. Koizumi's measures aim to improve lenders balance sheets as the fiscal year ends this month. Some investors say they may not help Japan avoid a fourth recession in a decade. ``The government has done too little too late,'' said Jun Terasaka, who helps manage $160 million in shares at Toyota Asset Management Co. ``Investors learnt a lesson after the government implemented stricter short-selling rules last year, which did little to sustain the market,'' The proposals failed to stem a slump in the Nikkei 225 stock average, which lost a fifth of its value in the past month. The Nikkei 225 traded at 7,921 as of 1:51 p.m. in Tokyo, down 0.3 percent for the day. The index closed Tuesday at 7862.43, its lowest since January 1983.
Falling Stocks
Japan's ruling coalition parties approved the Financial Service Agency's proposals, Financial Services Minister Heizo Takenaka said. ``They told us to move forward swiftly with our measures,'' Takenaka told reporters, after explaining his proposals to the coalition party leaders. Takenaka said the Bank of Japan may also be asked to take additional steps to help the economy and boost stocks. The Bank of Japan, which has allocated 2 trillion yen to buy stocks directly from banks, had purchased 906 billion yen of shares as of March 10. The measures won't be enough to make Japanese equity markets attractive, said one investor. ``Every time I give Japanese policy makers the benefit of doubt, I end up losing money,'' said Chua Soon Hock, chief executive at Asia Genesis Asset Management Pte. in Singapore, who declined to mention how much he manages in assets. ``Enough is enough.'' //www.quote.bloomberg.com