The central bank said on its website that it injected the sum onto the open markets at the start of the business day today.

Bank of Japan governor Masaaki Shirakawa earlier vowed to provide ample funds to financial markets after markets plunged across the world.

"The Bank of Japan will carefully monitor recent situations surrounding the US financial institutions and their influences, and will continue to strive to ensure smooth settlement of funds and maintain stability in financial markets through measures such as appropriate money market operations," he said.

Japanese share prices plunged some 4.5 per cent in early trade today. The market was closed on yesterday for a public holiday.

The financial turmoil came just before the Bank of Japan's policy board was due to begin meeting.

The bank is widely expected to keep its key interest rate at 0.5 per cent, which is the lowest among major economies, due to concerns that the world's second-largest economy will fall into recession.

It last raised interest rates in February 2007 in an effort to wean the economy off virtually free credit, but policy-makers have since grown concerned both about slowing growth and rising inflation.

Meanwhile, Kyodo News agency reported today that the Japanese unit of Lehman Brothers would file for bankruptcy protection at a Tokyo court after the US investment bank filed for bankruptcy.

Lehman Brothers Japan Inc will seek protection from creditors under the Japanese civil rehabilitation law, Kyodo said, quoting unidentified officials.

Its parent, the 158-year-old investment bank, filed for Chapter 11 bankruptcy protection from its creditors yesterday.

Lehman was crippled by $US60 billion ($75.34 billion) in soured real-estate holdings and was unable to find an investment partner to throw it a lifeline.

Yesterday, Japan's financial watchdog ordered the local unit of Lehman Brothers to suspend operations.

The Financial Services Agency said in a statement that Lehman's Japanese operations - except those that involve returning assets to customers - would be suspended for 12 days starting Monday.

AFP