The Bank of Japan loosened monetary policy on Tuesday by topping up asset purchases in the face of mounting political pressure for bolder action to beat deflation and ease the pain on the economy from a strong yen.

The central bank boosted its asset buying and lending scheme, under which it buys government and private debt and lends cheap funds against various types of collateral, by 10 trillion yen ($130 billion), to 65 trillion yen. The entire increase amount will be for purchases of long-term government bonds, the BOJ said.

It also said it sees consumer inflation of 1 percent as a policy goal.

As widely expected, the BOJ left unchanged its key interest rate at a range of zero to 0.1 percent by a unanimous vote.

Governor Masaaki Shirakawa will hold an embargoed news conference with his comments expected to come out sometime after 4:15 p.m. (0715 GMT). ($1 = 77.4100 Japanese yen)

(Reporting by Leika Kihara and Rie Ishiguro; Editing by Chris Gallagher)

Bank of Japan Inflation