The Bank of Japan kept monetary policy steady and its governor said economic improvements alone would not trigger a withdrawal of stimulus, reassuring markets it will lag well behind its overseas peers in ending crisis-mode easing.
Governor Haruhiko Kuroda stressed the need to "patiently" maintain ultra-loose policy, with inflation still distant from the Bank of Japan's 2% target despite a strengthening economy.
Kuroda also rebuffed the criticism that prolonged easing could destabilise Japan's banking system, saying he saw no problem emerging in the financial sector, with lending on the rise.
"Our most important goal is to achieve our 2% inflation target at the earliest date possible," Kuroda told a news conference. "We won't raise interest rates just because the economy is improving."
As widely expected, the Bank of Japan kept its short-term interest rate target at -0.1% and the 10-year bond yield target around 0% - wrapping up a year in which the central bank made no change to policy.
The decision was made in an 8-1 vote.
Board newcomer Goushi Kataoka dissented for the third meeting in a row, arguing that the Bank of Japan should buy long maturity bonds so that yields for durations of 10 years and longer fall further.
In a sign of its conviction in the strength of Japan's recovery, the Bank of Japan revised up its assessment of capital expenditure and maintained its rosy view that the economy was expanding moderately.
Japan's economy grew an annualised 2.5% in the third quarter to mark a seventh quarter of growth in a row.
But core consumer inflation remains stuck at 0.8% and firms expect no major pick-up in price growth in coming years.
