Japan's central bank expanded a government bond buying programme today, acting to spur growth after news of another fall in industrial production.
The Bank of Japan's policy board voted unanimously to increase the asset purchasing programme by 11 trillion yen ($139 billion) to 91 trillion yen ($1.15 trillion).
The central bank decided against any change in its key interest rate, which remains at 0-0.1%.
The programme is intended to encourage borrowing and spending and help make Japan's exports more competitive.
A fresh barrage of negative data on Japan's failing recovery pumped up pressure for the central bank to act to help revive the world's third-largest economy.
Japan's industrial output contracted by 4.1% percent in September from August and 8.1% from a year earlier as automakers and steel mills cut production due to shrinking demand and antagonisms with China, according to the Ministry of Economy, Trade and Industry.
The economic recovery that followed Japan's March 2011 disasters has been doused by slowing global growth. Flaring tensions with China over disputed islands in the East China Sea have further crimped demand, especially for big-ticket items like cars.
Slowing growth in China has also hit demand for industrial inputs like steel and machinery.
"Industrial production is on a downward trend," the ministry said, forecasting a further decline in October, followed by a rebound in November.
Japan's Cabinet approved a 423 billion yen ($5.3 billion) emergency stimulus package on Friday, double the size originally expected.
The government was obliged to dip into reserves to pay for the new stimulus, since its leeway to boost spending is limited by a legislative standoff preventing issuance of some 38.3 trillion yen ($480 billion) in deficit financing.
As it confronts a "fiscal cliff," which could raise the country's borrowing costs, Japan already leads industrial nations with government debt amounting to more than twice the country's gross domestic product.
Exports, usually a bright spot for Japan's economy, are also faltering as the prolonged crisis in Europe crimps demand. Another problem is the persistent strength of the yen, which makes products made in Japan relatively more expensive in overseas markets.
Shipments of passenger cars dropped 12.6% in September from August and 13.2% from a year earlier. Shipments of virtually all other products also fell.
Japan's jobless rate figures for September likewise offered little encouragement, as the government reported the seasonally adjusted unemployment rate was 4.2% in September, unchanged from August.
The ratio of job offers to seekers fell to 0.81 from 0.83 in August, meaning there were 81 jobs for every 100 job seekers.
