Japan's central bank further eased monetary policy on Monday in response to a strong yen and growing political pressure to revive a faltering economy.

The move comes as Prime Minister Naoto Kan prepares a new set of economic stimulus measures, expected later on Monday after a meeting with the Bank of Japan governor Masaaki Shirakawa.

To boost liquidity, the central bank unveiled a new six-month, low-interest loan programme to financial institutions. Combined with an existing three-month funds-supplying operation worth JPY20 trillion (USD236.4 billion), banks will now have access to a total of JPY30 trillion (USD355 billion).