Tokyo: The Bank of Japan (BoJ) was to hint at options for future easing when it concluded a two-day board meeting yesterday, although it was unlikely to announce any immediate policy shift in response to government pressure to do more to fight deflation.

Finance Minister Naoto Kan turned the pressure on the central bank up a notch last week saying inflation of one per cent was the minimum needed for price stability, a goal that has eluded Japan in nine of the past 10 years.

Core consumer prices fell 1.3 per cent from a year earlier in December, the 10th month of decline, while the GDP deflator, a broad gauge of price trends, hit a record 3 per cent in the fourth quarter, underlining growing deflationary pressure in the world's second-largest economy.

The BoJ says it is committed to fighting deflation.

"We are serious about ending deflation," Governor Masaaki Shirakawa told parliament on Tuesday.

"It will take time and it's not something the BoJ alone can achieve. But we will be doing all we can."

Kan's view of price stability is in line with that of the central bank, which has said it will not tolerate zero inflation. In December the BoJ defined price stability as annual inflation of 2 per cent or below, with one per cent as an ideal level.

The mere mention by Kan of a price stability goal raises pressure on the central bank, which appeared to yield to government criticism by calling an emergency meeting in December to announce it was pumping more cash into the banking system.

While Kan's comments did little to change expectations that the BoJ will stand pat, investors are looking for any hints of future policy easing.

"The BoJ is probably thinking they have already provided their response in December on inflation targeting. So I don't think there will be new announcements," said Mari Iwashita, chief market economist at Nikko Cordial Securities.

With interest rates at 0.1 per cent the BoJ has relatively few conventional weapons left in its policy arsenal.

It could pump more money into the banking system as it did on December 1, helping crush yen Libor rates and weaken the Japanese currency, thereby reducing deflationary pressure. The yen is about 4.4 per cent weaker against the dollar than it was on November 30.