The move is aimed at signaling Tokyo's willingness to work in step with the United States as Washington has enacted tough sanctions against Teheran over its uranium enrichment program, which Western nations view as a cover for the production of nuclear weapons.

But one of the sources said the Japanese government should avoid worsening its ties with Iran because it is a major supplier of crude oil for Japan, saying, "We should avoid a situation where we would have trouble obtaining crude oil" from the country.

A Japanese-Iranian diplomatic source said the question could be a handful to Japan. "If Japan leans toward the United States, it could adversely affect Japan's strategy in energy procurement. If Japan leans toward Iran, it could cause a chasm in ties between Japan and the United States."

"This is a problem that could have repercussions on corporations and individuals in Japan," Foreign Minister Katsuya Okada said at a news conference Friday. "We will unveil (the punitive measures) without spending too much time, while examining the matter comprehensively."

Under sanctions enacted by the United States in early July, foreign companies that export petroleum products to Iran would be expelled from U.S. financial markets.

A source in a government office concerned with economic affairs advised against taking a similar stance, saying, "Iran is an important trading partner (for Japan). We cannot take a tough stance as does the United States, which has severed diplomatic ties" with Iran.

A senior Foreign Ministry official suggested that the ministry will look to the European Union's responses as a reference.

As possible punitive measures, the government is believed to be considering financial sanctions against individuals and groups involved in Iran's nuclear ambitions, according to observers.