The Bank of Japan kept its ultra-loose monetary policy unchanged, as widely expected, on Wednesday.
The policy board of the BoJ decided to purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.
The board retained the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.
The BoJ will conduct purchases of Japanese government bonds in a flexible manner so that the outstanding amount will increase at an annual pace of about JPY 80 trillion.
Regarding economic outlook, the bank said Japan's economy is likely to continue its moderate expansion.
Inflation is likely to increase gradually toward 2 percent, mainly on the back of the output gap remaining positive and medium- to long-term inflation expectations rising, BoJ added.