The Bank of Japan may extend several trillion yen in loans to financial institutions in July as part of a new program to combat deflation and bring about a sustainable economic recovery, sources said.

The scope and other details of the lending program are to be hammered out when the BOJ Policy Board meets from June 14 to 15, the sources said.

The BOJ wants the measure to supplement the government's long-term growth strategy through 2020. The strategy is to be compiled by the end of the month.