The Bank of Japan on Tuesday unveiled $138 billion in fresh monetary easing, its latest volley in a battle to kickstart an economy it warned would grow much less than previously expected. The BoJ, which also said it would provide new loans to banks, had been under pressure from politicians calling for urgent action, as more data indicated a post-disaster recovery is stalling because of the global slowdown and strong yen. Official data Tuesday showed factory output came in weaker than expected for September, while Japan recently posted its worst September trade figures in more than 30 years, as a territorial dispute with China hit exports. The BoJ said it would expand an asset-purchase programme -- its main policy tool -- by 11 trillion yen ($138 billion) to 91 trillion yen, while keeping rates unchanged at between zero and 0.1 percent. The move its its second since central banks in the United States and debt-hit Europe announced huge policy easing measures in September to stoke growth.The BoJ programme is aimed at injecting liquidity into markets through purchases of government and corporate bonds, and commercial paper. Tuesday\'s expansion was aimed at preventing \"Japan\'s economy from deviating from the path of returning to a sustainable growth path with price stability\", the BoJ said in a statement. A new programme offering \"unlimited\" loans to commercial banks was designed to spur their own lending to businesses and households, it added. However, the new measures came with a warning as policymakers slashed their growth forecast for the fiscal year to March, saying the economy would expand just 1.5 percent, well off an earlier 2.2 percent estimate. The BoJ also said it expects prices to have fallen 0.1 percent in the year to March, instead of the 0.2 percent inflation tipped earlier, suggesting Japan was a long way from winning its battle with deflation that has plagued its economy for years. A rare BoJ-government joint statement said politicians and policymakers were committed to quashing the problem \"as early as possible\". Japan has been stuck in a deflationary spiral -- cutting corporate profits and encouraging consumers to put off new purchases -- with efforts to battle a general trend of falling prices having little impact.Earlier Tuesday, official data showed Japan\'s factory output fell 4.1 percent last month, worse than the 3.1 percent fall expected by the market, with a slump in production of cars, auto parts and machinery leading the downturn. The figures underscored slowing demand for Japanese exports and the impact of a diplomatic tussle with China which has hit the Asian giants\' trade ties. Japan\'s economy, which was hammered by the quake-tsunami disaster on March 11 last year, is also suffering from Europe\'s long-running debt crisis and the strong yen. The Japanese currency hit record highs around 75 on the dollar late last year and remains strong, making exporters\' products more expensive overseas while shrinking the value of their repatriated foreign income. The problem is particularly acute for major export brands such as Japan\'s automakers. Honda Motor said on Monday that the yen\'s strength would dig into its full-year profit, now expected to be about 20 percent lower than previously forecast. Japan\'s jobless rate, meanwhile, remained steady at 4.2 percent in September, largely due to post-disaster reconstruction-related employment, but household spending slipped 0.9 percent on-year, a sign of weakening consumer confidence. Auto production tumbled 12.4 percent last month partly due to a drop in sales in China, the world\'s biggest vehicle market. Japan-China trade has been hurt by a long-standing spat over an East China Sea archipelago, called the Senkakus in Japan and Diaoyu islands in China, which erupted anew after Japan nationalised the chain in mid-September. Japanese factories and businesses across China closed or scaled back operations in September over fears they or their workers could be targeted by mobs protesting against Tokyo\'s move.