The Japanese government is considering a framework for injecting public funds into regional financial institutions as part of an economic stimulus package to mitigate the fall-out from the global markets crash on the world’s second largest economy.

The move to set aside funds for regional banks came as the Nikkei average on Friday plummeted nearly 10 per cent, closing the week down 24 per cent for its worst weekly decline. Yamato Life Insurance on Friday became the first Japanese financial institution to file for bankruptcy as a result of a sharp drop in the value of its investments owing to the global market crisis.