TOKYO, Japan?The Bank of Japan was holding an emergency policy meeting Monday amid speculation it will implement additional easing measures to help the economy, which is being battered by a strong yen.

"Today... the chairman of the Policy Board decided to call an unscheduled monetary policy meeting," the central bank said in a statement announcing the meeting, which started at 9:00 a.m. (0000 GMT).

The meeting came as the government prepares to announce an outline of a new stimulus package on Tuesday with an appreciating yen seen harming the nation's fragile export-led recovery.

BoJ Governor Masaaki Shirakawa returned to Tokyo on Sunday from the United States, a day earlier than originally scheduled, for the hastily convened gathering.

The central bank said in the statement the policy meeting was to "discuss monetary control matters based on recent economic and financial developments."

Prime Minister Naoto Kan said he would meet Shirakawa later Monday to discuss foreign exchange rates and measures to boost the economy.

The yen last week hit 15-year highs against the dollar, threatening exporters as it makes their products relatively more expensive overseas while eroding repatriated profits.

Japan has long relied on its export sector for economic growth.

The emergency meeting prompted the yen to slip to 85.70 to the dollar, compared with 85.19 in New York Friday, as investors hoped for a positive surprise by Japanese authorities.

The Nikkei index of the Tokyo Stock Exchange also jumped more than two percent in early trade as investors welcomed the BoJ meeting after the headline index had plunged last week as exporter shares fell on a high yen.

The country remains under pressure to safeguard its fragile recovery, with weak gross domestic product growth of an annualised 0.4 percent in the second quarter pointing to a slowdown.

Kan said Friday he would outline measures to counter the effects of the yen's strength this week and implied possible intervention by saying he would take "determined steps when necessary."

Media have speculated that the BoJ might expand its program to provide funds to financial institutions at a fixed 0.1 percent for three months.

The central bank may lengthen the lending period for the funds to six months from the current three months and expand the program's total funds to 30 trillion yen ($350.55 billion) from 20 trillion yen, media said.

Such measures, if adopted, should help lower interest rates in the market place and bring down the yen.