"We must execute the measures with a determined will and resolve because (the Iranian nuclear problem) affects the nuclear non-proliferation regime and North Korea's nuclear problem," foreign minister Taro Aso told reporters after the cabinet approved the measures.

The cabinet of Prime Minister Shinzo Abe also decided to ban transfer of funds in connection with Iran's sensitive nuclear and ballistic missile programmes.

The measures will become effective Saturday.

Japan, despite being a close US ally, has maintained close trade ties with Iran. Asia's largest economy is almost entirely dependent on the Middle East for its oil, and imports about 15 percent of its total oil consumption from Iran.

Last year, the UN Security Council unanimously approved a resolution imposing sanctions that target Iran's nuclear and ballistic missile programmes.

Aso called on Iran to stop its uranium enrichment activities and return to the negotiating table before and after the passage of the resolution.

Western countries backed the sanctions, fearing Iran could use uranium enrichment activities to develop nuclear weapons.

Iran, which says its programme is for peaceful purposes, vowed to expand its enrichment.

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