Japan's ailing Nikkei 225 stock index could rise above 10,000 points if the government adopts a package of emergency measures due out next week, a top conservative lawmaker said yesterday.

Hideyuki Aizawa, head of a powerful group within the ruling Liberal Democratic Party (LDP) opposed to the reform policies of Prime Minister Junichiro Koizumi, said that the plans would accelerate the economy rather than slow it down, as current policies are doing.

"Ten thousand, easily," Aizawa said on a Sunday television programme when asked what the package could do for the Nikkei average share index .N225, which closed Friday at 7,900, not far off its lowest close in 20 years.

Aizawa is a leading figure of the LDP's tax panel and has considerable clout in the tripartite ruling coalition. His populist call for higher stock prices, which some see as short-term political opportunism, will nevertheless add to the pressure on Koizumi.

The prime minister, facing a leadership election in September, is struggling to make good on his promises to lift the economy from its 10-year slump. His personal popularity, which has kept him in the top job, is fading as economic bad news grows.

While he has insisted on sticking to policies of structural reform, daily newspaper headlines calling attention to falling stocks are battering his image and handing more ammunition to his opponents.

The package of stock market measures, due to be announced this week, is likely to include calls for the central bank to buy exchange-traded stock funds, or ETFs, as well as bank shares, and for the government to set up a stock-buying entity and use the massive reserves of the postal savings system to buy stocks.