Financial Services Minister Hakuo Yanagisawa reiterated Friday that the government's current full guarantee on regular and other forms of liquid deposits will end as scheduled on April 1.
"We will watch carefully for any sudden movements in deposits and work to improve stability in financial markets," Yanagisawa said. "That goes without saying."
Earlier in the day, Yanagisawa was instructed by Prime Minister Junichiro Koizumi to ensure that banks are fully prepared for April, when the government plans to limit its deposit guarantee to 10 million yen plus interest per depositor per bank.
Fearing a potential flight of depositors from banks perceived as being weak, Liberal Democratic Party members and some smaller regional banks, credit unions and cooperatives are demanding that the government extend the full guarantee on regular deposits beyond April 2003.
The government imposed a 10 million yen guarantee cap on time deposits last April.
Yanagisawa's statements came as the benchmark Nikkei average tumbled 3.41 percent Friday, closing at 9,591.03 and hitting banks' massive securities portfolios.