Bank of Japan Gov. Masaaki Shirakawa signaled the central bank's preparedness to bolster stimulus should Europe's deepening sovereign-debt crisis pose a larger risk to Japan's economy and financial markets.

"In the current time of high uncertainty regarding the future prospects of overseas economies, due attention is necessary to the risk that the yen's appreciation will dampen future growth," Shirakawa said Monday in Nagoya. "This is the very reason that the bank has embarked on monetary easing measures twice since this summer."

It is the third time in as many weeks that the governor has spoken about the threat Europe's debt woes pose on an economy that is recovering from the historic March calamity. Some BOJ board members said the risk to the economy has risen since last month, Shirakawa told reporters after a Nov. 16 policy meeting.