The Japanese government is preparing to intervene in currency markets to weaken the yen as it nears a record high against the dollar, Japan's Nikkei newspaper said Monday.
The report also said the Bank of Japan has begun discussing additional monetary easing.
The dollar earlier Monday fell to a four-and-a-half month low against the yen, but backed off from that level later in the session in a surge traders said was not the result of intervention.
If Japan intervenes, the BOJ's policy board will consider additional easing measures at a two-day meeting starting Thursday, Nikkei said. It added that a five to 10 trillion yen expansion of the central bank's 40 trillion yen asset-buying fund was a likely step.
The report also said the board will likely consider increasing purchases of government bonds and short-term securities, as well as buying corporate bonds and other riskier assets to help companies raise needed funds.
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