The Bank of Japan is expected to discuss easing monetary policy further at its rate review on Monday, sources familiar with the matter said.
The BOJ offered a combined 15 trillion yen ($183 billion) to the banking system on Monday in its first same-day market operation since the Greek debt crisis in May last year, to soothe market jitters in the wake of a devastating earthquake and tsunami that struck northeast Japan on Friday.
The central bank's policy board will likely discuss whether the sharp fall in Tokyo share prices and the potential damage from the quake to corporate profits warrant an immediate policy response, the sources said.
With nuclear plant shutdowns resulting in planned power outages, the BOJ is likely leaning toward easing now rather than later, on the view that corporate earnings will be severely hit by the quake, analysts say.
In a sign the government may have asked for the BOJ's support, Economics Minister Kaoru Yosano said on Monday he spoke with BOJ Governor Masaaki Shirakawa by phone, adding that the BOJ should work together with the government on the principle of the BOJ Law.
The BOJ cut short a two-day rate review to one day on Monday and pushed forward the timing of the meeting to noon (0300 GMT) from the initial 0400 GMT.
(Reporting by Leika Kihara; Editing by Michael watson)