Japan to Stop Sales of Shares Bought From Banks, Nikkei Reports

Written by Writer on Monday, October 13th, 2008

Japan to Stop Sales of Shares Bought From Banks, Nikkei Reports

By Naoko Fujimura (Bloomberg) — Japan will freeze sales of the 2 trillion yen ($20 billion) of shares it bought from the nation’s biggest banks between 2002 and 2006, to ease pressure on local markets as global stocks decline, the Nikkei newspaper said.

The government and the Bank of Japan, which began selling off the equities in fiscal 2006, may soon halt sales for as long as six months, the newspaper reported, without saying where it obtained the information.

Japan bought shareholdings from banks, including stock the lenders owned in one another, as an emergency measure to support a financial system weighed down by bad debt in the wake of the collapse of the bubble economy, the report said.

The government and central bank had planned to sell off all shares purchased from financial institutions over the next 10 years, the report said.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net