WASHINGTON (Bloomberg) The government may inject public money should the global credit turmoil threaten Japanese financial institutions, Finance Minister Shoichi Nakagawa said Friday.

"Japan started considering public fund injections just in case something happens," Nakagawa said in a joint briefing with Bank of Japan Gov. Masaaki Shirakawa after the two met with Group of Seven counterparts in Washington.

The global credit crisis wiped out more than $670 billion in market value from the Tokyo Stock Exchange's first section last week, depleting corporate capital and raising concern that Japan's banks are less immune to collapse than thought.

On Friday in Tokyo, Yamato Life Insurance Co. became the first Japanese insurer in seven years to file for bankruptcy, citing a decline in the value of its securities holdings.

Nakagawa made the remarks after the G7 issued a statement saying the member nations will "use all available tools" to prevent the failure of financial institutions and ensure they can "raise capital from public as well as private sources."

Nakagawa, who was also appointed the financial services minister, said Friday that he may revive a law that allows the government to pump public funds into regional lenders. The legislation expired in March.

He and Shirakawa said the effect of the global financial crisis on Japan has been limited relative to the United States and Europe, where banks are shunning lending to each other for fear they will lose the money or because they need it themselves.

Japanese banks have largely recovered from the malaise of the 1990s, when the collapse of stock- and property-market bubbles left lenders paralyzed with trillions of yen in bad loans.

Kaoru Yosano, the economic and fiscal policy minister, said yesterday that the banking sector hasn't weakened to the point where the law needs to be revived.

"Banks aren't in such bad shape that they require public- fund injections at this point," Yosano said, hours after Yamato announced it would file for bankruptcy.

Japan poured ¥12.4 trillion into the nation's banks between 1998 and 2003, forcing mergers that cut the number of nationwide lenders to seven from more than 20. More than ¥9 trillion has already been repaid, with the government generating a return in excess of 10 percent.

Nakagawa said he told the meeting that Japan is ready to contribute money to the International Monetary Fund's emergency lending program to help crisis-hit countries.