The Bank of Japan is to consider cutting interest rates at a policy meeting later this week.
The Bank of Japan is due to meet on Friday following a recent plunge in Tokyo shares and a rise in the yen.
The Nikkei index share average has fallen to a 26-year low this week and has lost more than 50% since the start of the year. Last week, the yen was at a 13-year high.
The business daily Nikkei reported on Wednesday the bank is leaning towards cutting its 0.5% target rate for the unsecured overnight call money rate to 0.25%.
The yen slid by 5% after the report, posting its biggest percentage fall versus the US dollar since 1974.
The US Federal Reserve is widely expected to cut its benchmark interest rate this week - by at least 50 basis points from the current level of 1.5%.
The European Central Bank and the Bank of England are also expected to cut rates next week.
The Bank of England has already cut interest rates twice this year - it is currently 4%.
The European Central Bank cut its main lending rate by 0.50 percentage points to 3.75% on 8 October.