By: Adam Button

The Bank of Japan is putting all options on the table as pressure from the government mounts to halt deflation and the strong yen, according to a report from Reuters. Members of the BOJ's elite monetary affairs department have been drawing up plans for a bolder set of policy options since late last year, people with knowledge of those discussions say. They say the BOJ believes it must do something dramatic in order to keep the government from rewriting its charter. They are talking about a massive bond buy or purchasing foreign bonds. Some inside this circle advocate a shock to the system with a "big-bang" increase in government bond buying to the tune of 100 trillion yen ($1.22 trillion) in one go, instead of the much-criticized baby-step approach of incremental increases, people familiar with the discussions say. Overnight economic data from Japan was much stronger than expected and that diminishes the urgency to act but the tone of the story is desperation. The results mean 2013 could be the year of yen weakness but radical BOJ action could also light the fuse of the next crisis.