The Bank of Japan held fire on a fresh round of stimulus Friday, despite weak inflation that has defied its more than two-year-old monetary easing programme.
In a widely expected decision, the central bank said it would stand pat on a record 80 trillion yen ($640 billion) annual asset-buying scheme that is aimed at boosting prices and kickstarting growth.
Traders are now waiting for a regular news briefing by BoJ chief Haruhiko Kuroda.
"Japan's economy has continued to recover moderately," the BoJ said following a two-day meeting.
Policymakers pointed to an improvement in exports, factory output and capital spending, as Tokyo pushes companies to hike wages in a bid to stimulate consumer spending, after a sales tax rise last year pushed Japan into a brief recession.
"Against the background of steady improvement in the employment and income situation, private consumption has been resilient and housing investment has been picking up," the bank said.
However, a drop in energy prices was weighing on inflation, it added.
Japan's near-zero inflation rate is far below the BoJ's 2.0 inflation target, a cornerstone of efforts to bolster the world's number three economy and conquer years of deflation.
Last month, the central bank cut its economic growth and inflation forecasts, as analysts warned over a disappointing second quarter that underscores the wobbly success of Tokyo's Abenomics growth project.
The BoJ said the economy would expand 1.7 percent in the fiscal year to March 2016 while inflation would come in at 0.7 percent. That was down from earlier estimates of 2.0 percent and 0.8 percent, respectively.
In a recent interview with Japan's top-selling Yomiuri newspaper, Kuroda said that, despite the weak economy, there was little chance of imminent policy moves.
"At this point, I do not see a need for additional easing," he told the paper.
Kuroda has insisted the bank is track to hit its target by next year, but economists widely expect the BoJ to launch fresh stimulus later this year to counter the downturn.