Tokyo: Japan Tuesday expressed concern over the rejection of the U.S. government's $700-billion bail-out plan by the U.S. House of Representatives.

Japanese Prime Minister Taro Aso assured that the government would take any measures necessary to prevent negative effects on the nation's economy and work closely with the international community to avoid a meltdown of the global financial system.

Economic and Fiscal Policy Minister Kaoru Yosano said that he understood the "delicate" situation in the US just before the November presidential election.

"But we are deeply concerned," Yosano said. "This issue has great impact not only on the U.S. economy but also on the global economy."

Yosano added that he hoped to see the U.S. Congress continue discussions and come out with a better result.

Meanwhile, Finance Minister Shoichi Nakagawa expressed surprise over the rejection of the bail-out plan, saying that Japan would monitor further developments until the U.S. Senate votes on the bill.

"Japan will work closely with the US and Europe and watch the situation calmly with the hope that the U.S. Congress will achieve some kind of progress," Nakagawa was quoted by Kyodo News Agency as saying.

He called on investors in the Japanese stock market to react calmly because Japan was likely to suffer only a relatively small impact.

"The impact (of the subprime loans) in Japan is considerably small compared with the U.S. and Europe," Nakagawa said. "I hope the Japanese markets will carry out a thorough risk analysis and react calmly."

The Tokyo stock market plummetted nearly 5 percent in morning trading Tuesday after an overnight heavy sell-off on Wall Street.

The US House of Representatives rejected a massive government plan to rescue the economy from financial meltdown.

The rejection comes despite dire warnings and support for the bill from congressional leaders of both political parties, as well as U.S. President George W. Bush.