The Bank of Japan's injected one and a half trillion yen ($A17.58 billion) into markets today, as Japan scrambles to calm fears about a financial crisis after US investment bank Lehman Brothers filed for bankruptcy.
Financial Services Minister Toshimitsu Motegi has tried to ease fears by saying the impact on Japanese financial institutions is limited.
Japan's central bank pumped 1.5 trillion yen into money markets even before trading began to prepare for possible volatility.
Tokyo's Nikkei 225 index has plunged more than five per cent, falling under the 12 thousand-point level for the first time since mid-March.