Japan's central bank has held fire on unleashing more stimulus, after its surprise introduction of negative interest rates earlier this year was slammed as a desperate bid to stir growth. 

The decision was widely expected, as policymakers gauge the impact of their unprecedented move. 

But analysts predict that the Bank of Japan will be forced to act again after the world's number three economy shrank in the last quarter of 2015. 

The policy announcement was the Bank of Japan's first since it shocked markets in January by unveiling a below-zero interest rate policy, effectively charging commercial banks to deposit some of their reserves in its vaults. 

The unprecedented move for Japan's central bank is aimed at giving banks an incentive to lend out money and, in turn, stoke growth in the wider economy. 

But the plan was widely criticised with analysts saying it was unlikely to boost loans, given already weak demand from both businesses and ordinary people.

The Bank of Japan's chief Haruhiko Kuroda cited financial market turmoil and slowing growth in China as he ushered in the -0.1% rate for new reserves, and said the bank may go even further into negative territory. 

The bank pointed to a "moderate recovery" in Japan's economy today, but conceded that exports and industrial production have been weak because of a slowdown in emerging economies. 

It made no change to its 80 trillion yen ($705 billion) asset-buying plan. 

The Bank of Japan's policies are a cornerstone of Prime Minister Shinzo Abe's big-spending, easy money growth plan, dubbed "Abenomics". 

But the high-profile venture has largely failed to generate a sustained recovery in Japan's economy or conquer the deflation that has weighed on growth for years. 

In a stark acknowledgement of the huge job ahead, the Bank of Japan in January cut its inflation forecasts and pushed back the timeline for reaching a 2% inflation goal.