The Bank of Japan kept its current pace of monetary stimulus, clinging to hopes that an economic recovery is in sight despite soft domestic capital expenditure and challenging global business conditions.
It also kept intact its assessment that while exports and output were feeling the pain from weak emerging market demand, Japan's economy has continued to recover moderately.
"Emerging economies will likely emerge from the doldrums helped by solid growth in advanced economies. Exports will move sideways for the time being, but will likely recover moderately," Bank of Japan's Governor Haruhiko Kuroda told a news conference.
"Rises in exports and progress in inventory adjustment in some sectors are also expected to help factory output recover gradually," the Governor said.
But the central bank offered a slightly more cautious view than last month on inflation expectations - or how the public perceives future price moves - underscoring its concern over a lack of success in nudging companies into boosting wages and investment.
As widely expected, the Bank of Japan reiterated its pledge to increase base money, or cash and deposits at the central bank, at an annual pace of 80 trillion yen ($650 billion) through purchases of government bonds and risky assets.
"Inflation expectations appear to be rising on the whole from a somewhat longer-term perspective, although some indicators have recently shown relatively weak developments," the bank said in a statement announcing the policy decision.
