The remarks are the government's boldest since authorities intervened to sell yen on Sept. 15 on what it hopes the independent central bank will do to help revive a faltering economic recovery.
BoJ Gov. Masaaki Shirakawa promised the central bank would take timely and appropriate action if it deemed the economic recovery was under threat, although in the past it has been wary of raising the debt ceiling.
Analysts say they expect the US Federal Reserve to also consider buying its government's bonds as the US recovery also shows signs of faltering.
A similar move by the BoJ would be timely as Prime Minister Naoto Kan ordered his ministers on Monday to form an extra budget for this fiscal year as evidence mounted that the economy is weakening.
Japan's annual exports growth slowed in August for the sixth straight month and its trade surplus fell for the first time in 15 months, Ministry of Finance data showed.
"The three options available to the BoJ are lowering rates, increasing short-term funding and buying more government debt," said Nobuto Yamazaki, executive fund manager at DIAM Asset Management in Tokyo.
"The BoJ could opt for one of these three policies next week depending on how currencies move and the economy performs."
Japan's annualized economic growth rate braked hard to just 0.4 percent in the April-June quarter from 4.4 percent in the January-March period.
The slide in the pace of exports has raised concerns that economic growth has slipped further in the third quarter. A surge in the yen to a 15-year high against the dollar below 83 yen on Sept. 15 added to those concerns, prompting the first official intervention in over six years.
The yen fell to 85.94 per dollar after intervention but has since drifted higher again to trade on Monday around 84.20.
Economics Minister Banri Kaieda said on Monday the BoJ should consider lifting a 21.6 trillion yen-a-year self-imposed ceiling on purchases of long-term government debt.
"I don't think it's a good idea to discuss expanding the limits after they are reached. They should start such discussions now," he said in an interview with a small media group.
Such a decision would be welcomed by the government. Public debt in Japan is already twice the size of the $5 trillion economy, giving it limited room to loosen fiscal policy.
But the BoJ has also long argued it too has limited room to loosen policy further after cutting its policy rate to just 0.1 percent.
However, sources have told Reuters that the central bank could loosen policy next week if the recovery is deemed by the board to be under threat.
The BoJ reviews policy on Oct. 4-5.
On Monday, Shirakawa promised timely and appropriate action — if needed.
The BoJ has been wary of a similar move as its holdings of Japan government debt is already near its self-imposed ceiling — equivalent to the amount of banknotes in circulation.
Shirakawa underlined his concerns saying that a cap gives credibility to BoJ policy and helps it maintain confidence in the yen.
The BoJ worries that raising the ceiling might be seen by markets as a willingness of the central bank to print money to fund public debt.
"We will hold a policy meeting next week and will guide policy appropriately," Shirakawa said in a speech to business leaders in western Japan.
Still, not everyone within the BOJ opposes increasing government debt purchases. Board member Ryuzo Miyao said last week it's one option for monetary policy.
Japan's exports in August rose by 15.8 percent from a year earlier, but that was below expectations for a 19.0 percent gain and was much weaker than the 2010 peak rate of 45.3 percent in February.
Exports growth to China, the country's top exports market, the Asia and the United States, all slowed.
