The Bank of Japan has started considering additional monetary easing steps in line with government efforts to support the country's economy, the Sankei newspaper reported on Thursday.
The most likely option under consideration is expanding the BOJ's fund-supply tool put in place in December, the paper said, without citing sources.
The central bank may either expand the size of the fund supply to 30 trillion yen ($352 billion) from the current 20 trillion yen, or extend the duration of cheap, fixed-rate loans to banks to six months from the present three months, the paper said.
Speculation has heightened that the BOJ may ease monetary policy further ahead of an expected meeting between Prime Minister Naoto Kan and BOJ Governor Masaaki Shirakawa next week.
The paper did not clarify whether the BOJ may ease policy at an emergency policy meeting or wait until the next regular rate review on September 6-7.
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