The government plans to ask the Bank of Japan to increase purchases of bank-held stocks to combat falling share prices and head off a financial crisis stemming from a possible war in Iraq, and has asked the central bank to ease its credit grip, officials said Wednesday.

The officials said the government may ask the BOJ to expand the 2 trillion yen target of its purchases of bank-held shares and further unwind cross-held shares by financial institutions and weak corporations ahead of March 31 book-closings.

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