Japan announced a package of measures Oct. 14 to stabilize the volatile stock market, including suspending sales of government-held shares.

Finance Minister Shoichi Nakagawa announces measures to protect Japan's financial system at a new conference Oct. 14. KYODO PHOTO

The move helped the benchmark Nikkei index skyrocket 1,079.13 points, or 13.04 percent, to end the morning session at 9,355.56 points, its biggest morning close in 18 years.

At a regular news conference, Finance Minister Shoichi Nakagawa, just back from the Group of Seven finance ministers' meeting in Washington, said the government may even step up buying financial shares if companies become unstable.

"If the situation changes, we will take appropriate measures at an appropriate time," he said. "But for the time being, our policy is to suspend sales of what we have."

During 2002 and 2006, the government and the Bank of Japan bought shares of ailing banks to prevent a meltdown in the banking sector. The government purchased about ¥1.6 billion worth of shares through 2006 while the central bank purchased ¥2 trillion worth of shares to 2004.

Oct. 14's move means the government will temporarily halt selling those shares. Nakagawa said he hopes the BOJ will follow suit with its portfolio.

The government will also extend the law allowing for public fund injections to protect people with life insurance, following the collapse of Tokyo-based Yamato Life Insurance Co. on Oct. 1.

When a life insurance company goes bankrupt, most benefits are paid to policyholders through public funds and via a fund managed by life insurers. But since the fund injection law will expire in March, the government plans to extend it for three more years just in case.