Japan's central bank on Friday announced another round of monetary easing in its latest effort to resuscitate the economy after figures revealed the outlook continued to weaken.

The Bank of Japan said it would increase its asset purchase programme by 5 trillion yen ($62 billion) to 70 trillion yen and keep interest rates at their super-low levels of between zero and 0.1 percent.

The latest easing move is yet another salvo in Japan's apparently endless battle with the deflation that has kept a stranglehold on the economy for years.

Data showed Friday that prices rose just 0.2 percent on year in March, almost solely due to rocketing energy prices, while unemployment remained static, household spending rose less than expected and industrial production remained weak.

The BoJ said its asset purchase programme would be expanded to "about 70 trillion yen by around end-June 2013."

The move comes after it last month almost doubled a loan programme to 5.5 trillion yen for reconstruction efforts after last year's quake-tsunami disaster, which along with flooding in Thailand battered the economy.

The central bank has been forced to resort to the unconventional measure as its ability to free up money has been limited since interest rates were cut to zero to 0.1 percent at the end of 2008 during the global financial crisis.

The BoJ said it "expects that, together with the cumulative effects of earlier policy measures, today's decision to further enhance monetary easing will better ensure the return of Japan's economy to a sustainable growth path with price stability".

In a forecast, the bank said gross domestic product would rise 2.3 percent this fiscal year, upping its January prediction of 2.0 percent growth over the 12 months to March 2013.

For the next fiscal year, the central bank predicted Japan's economy would grow 1.7 percent, up from its previous forecast of 1.6 percent.

Asia's second-largest economy shrank last year, hit by the huge earthquake and tsunami of March that left more than 19,000 dead and wreaked havoc with industrial production.

The BoJ said during fiscal 2011, which ended in March, the economy contracted 0.2 percent, slightly less than the January forecast of 0.4 percent.

The BoJ also predicted in its twice-yearly report that core consumer prices, a key indicator for its monetary policy, would rise 0.3 percent in fiscal 2012 and 0.7 percent in fiscal 2013.

But not everyone was so optimistic.

"The economy continues to be at a standstill," said Takeshi Minami, economist at Norinchukin Research Institute.

Minami said the economy would likely only gather momentum once the global economy begins picking up, but added that "the worst-case scenario" of Europe's debt crisis hurting emerging markets seemed to have been averted.

He noted, however, warnings of looming power shortages in Japan as all but one of the country's nuclear reactors remain offline owing to lingering public distrust of the technology after last year's crisis at Fukushima.

The only active one is due to shut down on May 5.

"It could damage supply when exports and reconstruction demand are growing toward summer. There are risks of its putting a damper on the economy."

Japanese power companies have cautioned a hot summer could bring blackouts for some areas unless nuclear plants are re-started.

An indication of the hill Japanese policymakers must climb came in the figures released hours before the BoJ move.

Unemployment in March stood still at 4.5 percent, while household spending rose an inflation-adjusted 3.4 percent from a year earlier, slower than the forecast 4.0 percent.

Industrial production only managed a small rise, and projected figures showed the outlook for the coming months was much gloomier.

Factories turned out a just 1.0 percent more goods in March than the previous month, according to the economy, trade and industry ministry.

The rise partially reversed a 1.6 percent fall in February but was smaller than a jump of 2.4 percent that was anticipated.