The Ministry of Economy, Trade and Industry will call on the Fair Trade Commission to allow companies to merge if their combined market share does not exceed 50 percent, instead of the current maximum of 35 percent, ministry sources said Monday.

METI also intends to urge the FTC to consider the combined shares of both the domestic and global markets in screening companies' merger proposals so Japanese firms will become more internationally competitive, they said.

There has been a wave of corporate mergers in industrial sectors, including steel and chemicals, since the collapse of the bubble economy around 1990.

But industry observers say domestic firms in many business sectors still lack size comparable to that of foreign industry leaders.

METI wants the antimonopoly regulations eased to allow companies to amass sufficient operations to better compete against their foreign rivals, the sources said.

The proposal is expected to be incorporated in the ministry's new strategy for promoting economic growth, which is to be set forth this May.

The FTC, however, has responded cautiously to METI's idea, arguing the guidelines it uses in approving corporate merger proposals are flexible enough to accommodate prevailing economic conditions.

According to the FTC guidelines, firms in the same business sector can merge if their combined market share does not exceed 25 percent when another firm controls at least 10 percent of the market.