Heizo Takenaka, minister for economic and fiscal policy, repeated his call Saturday for further quantitative monetary easing to combat deflation.
"I have not changed my position that (the Bank of Japan) should adopt a quantitative easing policy that matches the government's target of preventing deflation," Takenaka told a press conference after attending a public "town meeting."
Takenaka is to attend the second day of the central bank's two-day Policy Board meeting which will start Tuesday.
In March, the BOJ switched its strategy to targeting cash balances held by financial institutions at the central bank instead of key short-term interest rates.
Under the quantitative easing strategy, the BOJ is keeping the balance of commercial bank current accounts at the central bank at around 5 trillion yen, about 1 trillion yen above the average balance before the new strategy was adopted.
On Aug. 14, it further eased its monetary grip within the framework adopted in March following a further deterioration of the economy, including plunges on the Tokyo Stock Exchange.
The BOJ decided to inject more funds to increase the cash balance in current accounts held at the BOJ by financial institutions to some 6 trillion yen, a move aimed at boosting liquidity in the banking system.
The central bank also decided to increase its outright purchases of outstanding long-term Japanese government bonds to 600 billion yen a month from 400 billion yen.
As for Friday's failure of debt-saddled supermarket chain operator Mycal Corp., Takenaka said the failure should be taken into account an decisions on monetary policy.
Mycal, Japan's fourth-largest supermarket chain operator, filed for court protection from creditors Friday with 1.7 trillion yen in group liabilities, making it one of the biggest corporate failures in Japan.