The top policymaker in the ruling Liberal Democratic Party on Wednesday urged the state-run postal savings and pension fund systems to invest in stocks to help prop up the sagging market.
"Postal savings and pension funds could make profits if they are invested in stocks now because prices are near the bottom," Shizuka Kamei, chairman of the LDP's Policy Research Council, told a meeting at the party's headquarters. "There's no problem for them to put their money in stocks."
Many analysts are critical of any large-scale stock buying by state-run financial institutions such as the postal savings system because it could constitute stock market manipulation by the government.
But Kamei said it would "not be unnatural" for them to decide on buying stocks, although he would not force them to do so.
Kamei once again attributed the recent plunge in stock prices to moves by banks to unload their holdings of cross-held shares.
"The stock market is being disturbed by banks' selfish behavior. Is it justified if banks, as institutions trusted by the public, take such an action?" he asked.