Japan's ispace said its attempt to make the first private moon landing had failed after losing contact with its Hakuto-R Mission 1 (M1) lander when it unexpectedly accelerated and probably crashed on the lunar surface.

The startup said it was possible that as the lander approached the moon, its altitude measurement system had miscalculated the distance to the surface.

"It apparently went into a free-fall towards the surface as it was running out of fuel to fire up its thrusters," Chief Technology Officer Ryo Ujiie told a news conference on Wednesday.

It was the second setback for commercial space development in a week after SpaceX's Starship rocket exploded spectacularly minutes after soaring off its launch pad.

A private firm has yet to succeed with a lunar landing. Only the United States, the former Soviet Union and China have soft-landed spacecraft on the moon, with attempts in recent years by India and a private Israeli company also ending in failure.

Ispace, which delivers payloads such as rovers to the moon and sells related data, had only just listed on the Tokyo Stock Exchange two weeks ago and a frenzy of excitement around its prospects had driven up its shares some seven-fold since then.

But disappointment led to a glut of sell orders on Wednesday. After being untraded all day, the stock finished down 20 percent in a forced closing price decided by the bourse that reflects the balance of buy and sell orders.

Japan's top government spokesperson Hirokazu Matsuno said while it was sad that the mission did not succeed, the country wants ispace to "keep trying" as its efforts were significant to the development of a domestic space industry.

Japan, which has set itself a goal of sending Japanese astronauts to the moon by the late 2020s, has had some recent setbacks. The national space agency last month had to destroy its new medium-lift H3 rocket upon reaching space after its second-stage engine failed to ignite. Its solid-fuel Epsilon rocket also failed after launch in October. (Reuters)