TOKYO (Reuters) - 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 its thinking said.
By timing its action with the government's big fiscal spending package, the central bank would aim to maximise the boost of its measures on the world's third-biggest economy, 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 case the central bank 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.
(Reporting by Leika Kihara, Minami Funakoshi, Takaya Yamaguchi and Sumio Ito; Editing by William Mallard)