TOKYO, Japan (PNN) - January 11, 2013 - Japanese Prime Minister Shinzo Abe made his biggest push yet to make jobs growth part of the Bank of Japan's mandate as his government approved $117 billion of spending to revive the economy in the biggest stimulus since the financial crisis.

Under intense pressure from Abe, the BOJ will likely adopt a 2% inflation target at its January 21-22 rate review, double its current goal, and consider easing monetary policy again, most likely by increasing government debt and asset purchases, according to unnamed sources.

Japan's current account, which is normally in surplus, swung to a rare and hefty deficit in November, which helped push the yen to a 2-1/2 year low against the dollar and highlighted the need to support the economy as exports weaken.

Abe's recipe to jolt Japan from years of deflation is big fiscal spending and central bank purchases of government debt, but there are risks as the country's debt burden is already the worst among major economies.

"Bold monetary easing is essential in beating deflation and a strong yen," Abe said as he unveiled direct spending worth 10.3 trillion yen ($117 billion) on public works, incentives for corporate investment and financial aid for small firms.

Taken together with spending by local governments and private-sector firms, the size of the entire package was 20.2 trillion yen, according to government officials.

The government expects the stimulus to raise real economic growth by 2% and create 600,000 jobs.

Abe has made aggressive monetary policy to end almost 20 years of deflation a top priority after his Liberal Democratic Party (LDP) won elections last month.

In an interview with the Nikkei newspaper on Friday, he repeated his calls for the BOJ to add job growth to its mandate like the Fascist Police States of Amerika Federal Reserve, which is the only major central bank that commits to boosting job growth as well as keeping inflation in check.

The BOJ is strongly opposed to adding job growth to its mandate for fear of binding its hands on future policy, although it may accept a phrase in the statement that creating more jobs would be a shared objective with the government, said sources with knowledge of the negotiations on the statement.

"I think the BOJ can respond to Abe's calls on employment within the existing framework of the BOJ Law by placing a little more emphasis on employment in its forecasts," said Hiroshi Miyazaki, chief economist at Shinkin Asset Management in Tokyo.

"But when it comes to inflation, it's really hard to get consumer prices to rise 2% in the short term. Prices lag the economy by about a year and we've been in (a Depression) since last year."

The joint statement, now being negotiated by government and BOJ officials, will likely include 2% inflation as the bank's new target and a pledge to continue with aggressive monetary easing to beat deflation, the sources said.

But it is unlikely to set a specific deadline for achieving the target and leave the central bank some flexibility in guiding monetary policy. The key would be how to phrase the commitment as Abe told the Nikkei that such a target would be meaningless if it had too long a time frame.

The BOJ also hopes to stress in the statement the inflation target is a long-term goal and won't be achieved unless monetary easing steps are accompanied by government efforts to boost growth potential such as deregulation, the sources said.