The Bank of Japan nudged up its economic growth forecasts today and was cautiously optimistic about the global outlook.

However it said ongoing risks meant it was far to soon to consider scaling down its massive stimulus programme. 

Japan's central bank signalled an expected domestic boost from a government fiscal spending package and Governor Haruhiko Kuroda, citing the US-China Phase 1 trade deal, said overseas risks have subsided somewhat.

But at a time when other major central banks are reassessing their accommodative monetary stance, he also reiterated the Japanese bank's resolve to maintain its ultra-easy policy in light of soft inflation and lingering uncertainty abroad. 

"As such, the current easy monetary policy bias will be sustained for some time," he told a briefing after the Bank of Japan kept monetary policy steady as widely expected.  

Kuroda also played down chances of a policy review any time soon. "In Japan, inflation is unfortunately distant from our 2% target. It's premature to change our monetary policy framework, or start debate on it," he said. 

At a two-day rate review that ended today, the Bank of Japan kept its short-term interest rate target at -0.1% and a pledge to guide 10-year government bond yields around 0%. 

It maintained guidance that commits to keeping rates at current low levels, or even to cut them, until risks keeping it from achieving its 2% inflation goal subside. 

In a quarterly review, the Bank of Japan also revised up its growth projection for the fiscal year beginning April 2020 to 0.9% from 0.7%, helped by the government's fiscal package. It also hiked its estimate for 2021.

But Kuroda said it would take a clearer tick-up in growth for the Bank of Japan to consider tweaking the guidance on rates, and the bank largely maintained its price forecasts that show inflation missing 2% up to early 2022.  

The Bank of Japan targets rates in guiding policy under a framework dubbed yield curve control. 

It also continues to buy huge amounts of government bonds and risky assets in an effort to fire up inflation to its elusive target.

Kuroda said Japan's $122 billion fiscal package and receding overseas risks, such as a temporary truce in the US-China trade war, would underpin growth. 

He was also upbeat on the outlook for capital expenditure and private consumption, saying the hit to households from last October's sales tax hike would be temporary. 

"Japan's economy is likely to continue expanding moderately as a trend," he said. "There is no change to the price trend." 

The world's third-biggest economy ground to a near halt in July-September and is likely to have contracted in the final quarter of last year as global trade tensions knocked exports. 

Bank of Japan officials are counting on a rebound in global growth that would underpin the export-reliant economy. 

The International Monetary Fund yesterday trimmed its 2020 global growth forecasts on sharper-than-expected slowdowns in emerging markets, but said the U.S.-China deal was another sign that manufacturing activity may soon bottom out.