Japan's central bank has today maintained its massive stimulus and projected inflation missing its 2% target for years to come.

This came amid fresh curbs to combat a spike in Covid-19 cases overshadow the boost to growth from solid global demand.

The Bank of Japan also warned of "high uncertainty" on how much the pandemic could drag on growth, signalling its readiness to keep its money spigot wide open for the foreseeable future.

Japan last week declared a third, two-week state of emergency for Tokyo, Osaka and two other prefectures to contain the pandemic, clouding prospects for a fragile economic recovery.

In a quarterly report released after today's rate review, the Bank of Japan slightly revised up its growth forecast and stuck to its view the world's third-largest economy would recover as robust US and Chinese demand underpins exports.

But the central bank cut this year's price forecast and predicted for the first time that inflation would stay well short of its 2% target beyond Governor Haruhiko Kuroda's term, which ends in early 2023.

"It's true that under the current forecasts, inflation won't reach 1% even in fiscal 2023. That means achievement of our 2% target will be beyond fiscal 2024," Kuroda told a news briefing.

But he said inflation was gradually expected to accelerate as Japan's economy emerges from the pandemic's initial hit.

"The global economy has recovered quite clearly and world trade has rebounded to pre-pandemic levels. Japan's exports and output continue to increase, helping lift corporate profits and capital expenditure," he said.

As widely expected, the Bank of Japan maintained its short-term interest rate target at -0.1% and that for 10-year bond yields around 0%.

The Bank of Japan trimmed its core consumer inflation forecast for the fiscal year that began in April to 0.1% from 0.5% estimated in January.

The cut was due largely to the effect of mobile phone fee cuts, the Bank of Japan said. When excluding such transitory factors, consumer inflation is moving on a "firm note," it added.

"While it will take time, consumer inflation will gradually heighten towards the Bank of Japan's target," the report said.

The central bank projects inflation to accelerate to 0.8% in fiscal 2022 and 1% the following year, the report showed.

Markets largely expected the Bank of Japan to stand pat, after it conducted a review of its tools in March to make them sustainable enough to weather an expected prolonged battle to fire up inflation.

Eight years of stimulus attempts by Kuroda have failed to fire up inflation to his 2% target.

Japan's core consumer prices fell for the eighth month in a row in March as the blow from the pandemic weighed on consumption and wages.