The head of the Bank of Japan has said that he would consider pulling the trigger on more stimulus if weak oil prices keep holding back inflation.

BoJ chief Haruhiko Kuroda said Japan's economy was perking up, and the bank held off expanding its record 80 trillion yen ($640 billion) annual asset-buying scheme following a two-day meeting.

But the country's near-zero inflation rate is far below the BoJ's 2% target, a cornerstone of efforts to boost the world's number three economy and conquer years of deflation.

"We would consider adjusting policy if oil rates affect price trends and impact on underlying price movements," Kuroda told reporters.

"But that is not the situation right now. We will continue to watch oil price trends and see how they influence underlying price movements."

A glut of crude oil supply is seen as the main driver for a sharp decline in oil prices that has seen crude fall about 50% from mid-2014 levels.

Last month, Japan's central bank cut its economic growth and inflation forecasts, fuelling speculation that it would soon expand its easing scheme, aimed at boosting prices and kickstarting growth.

Economists widely expect the bank to act before year's end to drag inflation higher.

After a brief recession last year, Japan posted stronger-than-expected growth in the first quarter as a pickup in capital spending drove the recovery.

The 1% expansion in January-March - or 3.9% on an annualised basis - was sharply up from an initial estimate of 0.6% growth.

However, many economists expect second-quarter growth to be weaker, boosting the case for more BoJ policy action.

Earlier, the bank kept its view that Japan's economy was continuing to "recover moderately".

Policymakers pointed to an improvement in exports, factory output and capital spending, as Tokyo pushes companies to hike wages in a bid to stimulate consumer spending, after a sales tax rise last year hammered demand.

"Against the background of steady improvement in the employment and income situation, private consumption has been resilient and housing investment has been picking up," the bank said.

The BoJ has said it expects the economy to expand 1.7% in the fiscal year to March 2016 while inflation would come in at 0.7%. 

That was down from earlier estimates of 2% and 0.8%, respectively.