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Japan will prepare an outline of fresh economic stimulus measures "as soon as possible", the government's top spokesman said Thursday, amid reports that a plan could be ready by the end of the month.
Chief Cabinet Secretary Yoshito Sengoku said the government would draw up stimulus plans in the coming days.
"Given the current situation, we will decide on it as soon as possible," he told reporters.
His comments came as the Nikkei business daily and other media said the government plans to compile an outline of the fresh economic package by the end of August, or Tuesday, citing unnamed government sources.
It said Prime Minister Naoto Kan was considering a supplementary budget to pay for the package of new measures, without citing sources.
Pressure on Japan to conjure bolder economic policy and counter the effects of the strong yen is increasing as stocks fall and softening export growth and weak gross domestic product data point to a slowing recovery.
Exports have been crucial to Japan's post-recession growth but the yen's current strength against other major currencies harms repatriated overseas profits, amid fears the strong currency could send more production abroad.
All of which pose a challenge for Prime Minister Naoto Kan's government and its agenda focused on cutting the industrialized world's biggest public debt, at nearly 200 percent of GDP.
Hiromasa Yonekura, the president of Japan's major business lobby the Japan Business Federation (Keidanren) told reporters he told Kan that the government "should intervene in the currency market".
The yen has steadily appreciated against the dollar in recent months as global investors have shunned the US currency due to the uncertain outlook of the world's number one economy.
The unit's rise to 15-year highs against the greenback and a nine-year high against the euro helped push the Nikkei index below the 9,000 level Tuesday.
For every one-yen rise against the dollar, Japan's exporters can lose tens of billions of yen earned overseas when repatriated, threatening a sector that Japan depends on to offset its weak domestic market.
Given lower stock prices and the yen's upsurge, the Bank of Japan is considering additional monetary easing such as injecting more funds into money markets, the Nikkei has reported.
