Japan's central bank, the Bank of Japan (BoJ) has expanded its stimulus fo the economy to boost growth as the world's third largest economy continued to show signs of weakness.

The central bank has said that it will expand its asset purchase programme by 11 trillion yen or about $ 138 billion. BoJ is also offering unlimited loans to banks in the country boost domestic demand and encourage lending. Experts say that the measures would help the economy but the central bank is required to further steps to boost the economic growth.

The measures by the government will include measures to curb deflation, ease strength in the yen, expand earthquake reconstruction work and relax regulations on businesses. Japanese government is considering funding the new stimulus with 910 billion yen that were allocated for economic emergencies and the revitalization of regional economies in this year national budget.

The demand for credit in the Japanese economy has been affected due to deflation and a high exchange rate. The situation has prevented the country from boosting its domestic consumption in recent years. Falling prices have forced consumer to postpone purchases expecting to get cheaper prices while a high exchange rates have made Japanese goods more expensive for foreign buyers.

The Japanese Yen has risen more than 6 per cent against the US dollar since April 2011.