Prime Minister Junichiro Koizumi wants legislation developed to prevent terrorist groups from making profits through futures contracts on Japanese stock markets, government officials said Friday.

Terrorists could earn unlawful profits through trading in stock futures, Koizumi told a Cabinet meeting.

"I understand this is a serious matter and I am considering countermeasures," he was quoted as saying.

Following his remarks, the government is expected to study measures, including new legislation, to prevent money being earned through stocks or commodity trading from being used to fund terrorist activities.

Osama bin Laden, the Saudi exile suspected of masterminding the Sept. 11 terrorist attacks in the United States, is suspected of earning enormous profits by selling short a large amount of shares on futures markets in several nations shortly before the attacks, anticipating plunging stock prices.

As Japan has no law to address this kind of crime, the state cannot sign an international treaty prohibiting transfer of money earned on illegal sales to terrorists.

The treaty, along with several other pacts Japan has signed, is considered important to counter terrorism.

The Financial Services Agency has already launched studies on new steps to pave the way for Japan to sign the international pact, such as imposing obligations on financial institutions to report to the agency if they detect illegal money flows.

The government is also discussing with the Justice Ministry measures to prevent money-laundering.