The Bank of Japan held off on expanding stimulus on Wednesday, even as slumping exports and falling oil prices threaten its rosy projection that the economy is on track to hit its ambitious 2 percent inflation target next year.
But lingering fears of recession will keep the central bank under pressure to ease at a more crucial meeting on Oct. 30, when it is expected to cut its long-term economic and price forecasts, analysts say.
As widely expected, the central bank maintained its pledge to increase base money at an annual pace of 80 trillion yen ($666 billion)through aggressive asset purchases.
"Japan's economy continues to recover moderately although exports and production have been affected by the slowdown in emerging economies," the BOJ said in a statement, keeping its assessment of the economy unchanged from the previous month.
BOJ Governor Haruhiko Kuroda will hold a news conference at 3:30 p.m. (0630 GMT) to explain the policy decision.
The BOJ has kept monetary policy steady since expanding stimulus in October last year.