The country's consumption tax was hiked to 8 percent from 5 percent this month, a move many market watchers expect will slow economic growth and trigger a response from the BOJ.
The last time Japan lifted the sales tax in 1997 to 5 percent from 3 percent, the economy slipped into recession shortly afterwards.
In a news conference held after the decision, BOJ governor Harihiko Kuroda said while Japan's economy could slump in the second quarter on the onset of the tax hike, he expects a rebound from the third quarter on improvements in jobs and income conditions.
He also expects consumer inflation to reach BOJ's 2 percent around the end of fiscal 2014 through to early fiscal 2015.
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Analysts say Kuroda upbeat view of the economy suggest further easing may happen later, rather than sooner.
"Earlier, we had expected the consumption tax hike may have brought in further easing from the BOJ but we changed that call when we looked at the tone of Kuroda's recent speech where he seemed quite happy with how things were tracking and certainly not too fearsome of what was coming form the tax hike," said Laura Fitzsimmons of JPMorgan, adding that she still expects easing down the line.