The Bank of Japan will consider additional easing measures as the government mulls fresh approaches to deal with a rising yen and falling share prices, a report said Thursday.
The central bank may expand its programme to provide funds to financial institutions at a 0.1-percent fixed rate for three months, the Sankei Shimbun said.
Such a measure, if adopted, should help lower interest rates in the market place and bring down the yen, the newspaper said.
The BoJ may also lengthen the lending period for the funds to six months from the current three months, the Sankei said.
Some market players have speculated that the central bank could announce its new measures this week, before a reported meeting between BoJ governor Masaaki Shirakawa and prime minister Naoto Kan next week.
Kan and Shirakawa are expected to discuss steady appreciation of the yen, which recently hit 15-year highs against the dollar, threatening a fragile export-led recovery.
Kan is also expected to decide an outline of new stimulus measures as early as September in a bid to safeguard Japan’s recovery, local media have said.