J-Com's market debut was less smooth than hoped

Shares in J-Com fell to below their issue price after the broker at Mizuho Securities tried to sell 610,000 shares at 1 yen (0.47 pence; 0.8 cents) each.

They had meant to sell one share for 610,000 yen (£2,893; $5,065).

Prime Minister Junichiro Koizumi said he did not want to see similar errors and called for new safety measures.

Banking Minister Kaoru Yosano and cabinet secretary Shinzo Abe said the finance ministry was working with Mizuho and the Tokyo Stock Exchange (TSE) to draw up counter-measures to prevent similar future mishaps.

Japan's Financial Services Agency, the country's financial watchdog, has started an investigation into the mistake and how to prevent a repeat.

"In order to maintain the credibility of the Tokyo Stock Exchange, I very strongly want this issue to be resolved quickly," Kaoru Yosano said.

'Monumental error'

Because of market rules, the mis-sold shares could not be bought for 1 yen, but may have been sold as low as 572,000 yen each.

The order represented 41 times the number of outstanding shares of recruitment firm J-Com.

Mizuho said the brokerage had repurchased the majority of the phantom shares it sold, but the error has so far caused it a loss of 27bn yen.

It almost matches the group's net profit of 28.1bn yen for the financial year to March 2005.

One of the firm's directors, Seijiro Takeshita, told the BBC: "This was initially a public offering listed issue on that day, meaning that obviously, the buybacks were extremely difficult to do, and for that reason it still is in a turbulent condition as we speak."

The episode prompted a fall of 3.4% in shares of Mizuho's parent company.

"It's a monumental trading error, but fortunately this is a large bank with deep reserves," said Jason Rogers, a credit analyst at Barclays Capital.

'Incomprehensible orders'

Shares in J-Com, which recruits staff for telecoms businesses, rose immediately after making their debut on Thursday.

However, they soon fell 100,000 yen to 572,000 yen - below their issue price of 610,000 yen - after the share sale order emerged.

The shares subsequently recovered, closing at 772,000 yen.

Takao Saga, a senior economist at Japan Securities Research Institute, said: "It's absurd that the exchange doesn't have any system to reject such incomprehensible orders."

The incident resembles an erroneous share sale which marred the market debut of advertising giant Dentsu in 2001. Broking firm UBS mistakenly sold some 65,000 Dentsu shares, most of which Dentsu subsequently had to buy back.