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Under government pressure, Bank of Japan mulling specific steps for easing: Sources

The Bank of Japan, under pressure from the government, is considering specific steps for expanding monetary stimulus on Friday to address signs of weakness in inflation, people familiar with the central bank's thinking said.

By timing its action with the government's big fiscal spending package, the bank would aim to maximize the boost of its measures on the world's third-biggest economy, which is struggling to escape decades of deflation, the sources said.

The Ministry of Finance is lobbying hard for the BOJ to ease policy further and has prepared a statement it will publish in the event that the BOJ eases.

"We welcome the BOJ's decision and will deploy all necessary policy steps including a scheduled big stimulus package," says a draft statement seen by Reuters.

It is uncertain whether the MOF has drafted the statement because there is a high chance the BOJ will ease policy or only because it is standard practice to prepare one as a precaution in case the central bank shifts policy.

But the fact a draft statement is being prepared suggests the government is keen for the BOJ to ease on Friday.

Some board members may dissent to BOJ Governor Haruhiko Kuroda's proposal for easing due to wariness over the rising costs...


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