Japan intervened in the currency market today for the first time since 1998 to shore up the battered yen.

The moves comes in the wake of the central bank's decision to maintain ultra-low interest rates that have been driving down the currency.

"We have taken decisive action in the exchange market," vice finance minister for international affairs Masato Kanda told reporters, responding in the affirmative when asked if that meant intervention.

The move came hours after the Bank of Japan's decision to maintain super-low interest rates to support economic growth, bucking a global tide of monetary tightening by central banks fighting to rein in soaring inflation.

"There's absolutely no change to our stance of maintaining easy monetary policy for the time being. We won't be raising interest rates for some time," Bank of Japan Governor Haruhiko Kuroda told a briefing after the policy decision.

The Bank of Japan's decision came after the US Federal Reserve delivered its third rate increase of 75 basis points in a row last night and signalled more hikes.

This underscored its resolve not to let up in its battle against inflation.

The dollar was last down nearly 1% at 143.5 yen, having earlier traded more than 1% higher against the Japanese currency.

As widely expected today, the Bank of Japan kept unchanged its -0.1% target for short-term interest rates, and 0% for the 10-year government bond yield.

The unanimous decision came after a board reshuffle that brought in two newcomers in July, one of whom replaced a dovish member who consistently dissented to keeping policy steady.

The vote count suggests the two members likely will not rock the boat on monetary policy decisions for the time being.

Japan's central bank also decided to phase out a pandemic-relief loan scheme and instead expand a liquidity operation targeting a broader range of corporate funding-needs.

"The Bank of Japan expects short and long-term policy interest rates to remain at their present or lower levels," the central bank said in a statement announcing the rate decision, making no change to its dovish guidance.

The Bank of Japan remains an outlier among a global wave of central banks withdrawing stimulus to battle soaring inflation, and will likely become the last major monetary authority in the world with a negative policy rate.

Japan's core consumer inflation quickened to 2.8% in August, exceeding the Bank of Japan's 2% target for a fifth month in a row, as price pressure from raw materials and yen falls broadened.

But Kuroda has ruled out the chance of a near-term withdrawal of stimulus on the view that wages need to rise more to sustainably achieve his 2% inflation target.

Kuroda's dovish message has worked to weaken the yen, contradicting the government's efforts to slow the currency's decline through verbal threats of yen-buying intervention.

Market players expect the yen's downtrend to continue and test Japanese authorities' nerves on whether they will resort to the ultimate weapon - yen-buying currency intervention.

Once welcomed for the boost it gives to exports, a weak yen has turned into a headache for Japanese policymakers as it pushes up the cost of importing already expensive fuel and raw materials.

The world's third-largest economy expanded an annualised 3.5% in April-June, but its recovery has been hobbled by a resurgence in Covid-19 infections, supply constraints and rising raw material costs.