'If the G7 fails to send a strong message, it will have a big impact which I am concerned could spread to Japan,' Mr Aso told reporters.

'I would like them to make an effort to reach an agreement that everybody can support,' he said.

He spoke after meeting with his finance minister and the Bank of Japan governor, who will both head to Washington for Friday's meeting of the Group of Seven major economies - Britain, Canada, France, Germany, Italy, Japan and the United States.

'It has been a long time since the G7 finance ministers' meeting has drawn such great attention,' Mr Aso said.

The finance chiefs meet after some of the worst sessions in history for global markets due to fears of a financial system meltdown set off in part by toxic housing loans given to high-risk Americans.

Japan, whose banks have been conservative lenders after their own crisis in the 1990s, have been relatively unscathed by the turmoil and used the opportunity to buy up the pieces from devastated Wall Street firms.

But Mr Aso warned that Japan's economy, already teetering on recession, was likely to be hit by slowing demand both in the US and China, its two largest trading partners. -- AFP