The Japanese prime minister, Junichiro Koizumi, has called for tighter trading measures on the country's stock markets after a huge "fat-fingered" trade by a stockbroker yesterday caused chaos at a company flotation, sent equities into a tailspin and brought substantial losses for the firm.

"We must take action to prevent another mistake," Mr Koizumi said today. "I want people to think of measures not to repeat the same kind of mistake."

Mr Koizumi made his comments as Japan's Financial Services Agency, the country's financial watchdog, launched an official probe into how the botched trade, in recruitment firm J-Com, occured, and how to make sure there was no repeat of the fiasco.

Yesterday, an unnamed trader at Japanese investment house Mizuho Securities, mistakenly placed an order to sell 610,000 J-Com shares at 1 yen each.

The sell trade - when he had intended to sell just one share, for 610,000 yen - represented an offer to sell a staggering 41 times the amount of shares in the company that were actually available to the entire market.

In the ensuing confusion, shares in J-Com initially tumbled as the market tried to identify the source of the trading error. Concern about possible mistakes at trading houses with lax risk controls sent banking stocks diving and then hit the wider Tokyo market.

It was initially unclear which firm had sparked the frenzied selling, with Mizuho Securities only admitted to being behind the order after the Asian markets closed at the end of trading.

But this was after the broker's mishap left the benchmark Nikkei stock market index nursing its third-largest fall for the year.

"We sincerely apologise for causing considerable trouble for those concerned," Mizuho said yesterday, with its president, Makoto Fukuda, admitting that his company faced losses of at least 27 billion yet or more than £128 million.

Although the rising losses are substantial, they do not endanger the Japanese brokerage's financial health. Mizuho is also investigating the incident and is in talks with the exchange about what happened.

Shares in J-Com also recovered to close up at the end of the trading day, with many internet "day-traders" believed to have netted substantial profits from the mistake.

Mr Fukuda said earlier on today that Mizuho had bought back many of the shares that were mistakenly sold.

The botched trade is also an embarassment for the Tokyo Stock Exchange, which has been criticised for allowing the trade to go through.

Its control systems have also been called in to question after it was forced last month to suspend trading in all of its listed companies after its computer system crash. It is believed to have been the first time ever the exchange had had to cancel trading in this way.

The debacle holds echoes of similarly expensive "key stroke" errors that can be highly costly for the brokerages involved. In 2001, Swiss-American investment bank UBS mistakenly sold 65,000 shares in advertising group Dentsu, which was also making its market debut.

Dentsu subsequently had to buy most of the shares back from the market.

Similar problems have occurred in the past, if rarely, on the London market, although it in most cases the identify of the perpetrators remains a mystery - except to themselves and the heads of their trading desks.

Mizuho has cancelled its Christmas party, which was due to take place last night.

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