The Bank of Japan Policy Board at its mid-November meeting rejected a proposal that the central bank purchase foreign bonds, but some members nevertheless entertained the idea as a way to further ease credit, according to minutes of the meeting released Tuesday.

Some board members also expressed the view that it is necessary to examine the issue of diversifying the measures used to provide the economy with liquidity -- including purchases of foreign bonds -- so the central bank would be prepared to respond to any further deterioration in the economy, the minutes show.

The proposal for foreign bond buying, put forward by Nobuyuki Nakahara for the second consecutive meeting, was voted down 8-1 as other members agreed there was no need to adopt such a measure at the moment.

But some members other than Nakahara "concurred that such purchases had certain advantages as a means of liquidity provision," the BOJ minutes show.

The board members also voted 8-1 to leave the current ultra-easy monetary policy unchanged, aiming to maintain the outstanding balance of private financial institutions' funds held at the BOJ above 6 trillion yen.

Regarding purchases of foreign bonds, one board member said the BOJ's purchases would improve its ability to provide liquidity because foreign bonds had low substitutability for funds in current accounts at the BOJ.

Also, unlike the BOJ's outright purchases of Japanese government bonds, its foreign bond buying would not cause concerns of fiscal discipline in the market, the member said.

"And third, they would have only a limited effect on neutrality of allocation of resources, unlike purchases of corporate bonds and stocks," the member was quoted as saying.

But a representative from the Finance Ministry questioned the advisability of foreign bond purchases as they involve some legal problems.

"Given that it was confirmed in the report of the central bank study group that the government should be solely responsible for foreign currency intervention in the current international currency system, it seems that various issues regarding purchases of foreign bonds by the bank need to be examined from a legal point of view," the minutes quote the representative as saying.