In the currency market, the Japanese yen slipped as much as 102.78 against the dollar after the announcement, compared to an earlier high of 101.09 against the greenback.
Japanese government bond yields briefly rose following the decision. The bid yield on the 10-year JGB turned positive to 0.002 percent before retreating to negative 0.025 percent. The bid yield on the 30-year JGB climbed to 0.532 percent, before retreating to 0.519 percent in the afternoon.
Japanese banking shares closed sharply higher, following the BOJ's decision to keep interest rates on hold - negative interest rates usually tend to eat into the profit margins of banks.
Shares of Mitsubishi UFJ closed up 7.35 percent, SMFG was up 7.33 percent and Mizuho Financial was up 6.83 percent.
Major exporters also reversed losses, with Nissan closing up 1.44 percent, Sony up 1.60 percent and Toyota climbing 3.23 percent.
In Australia, the ASX 200 gained 36.03 points, or 0.68 percent, to 5,339.60, with most sectors ending higher. The energy sector added 0.89 percent and the heavily-weighted financial sector gained 0.81 percent.
South Korea's Kospi index closed up 10.28 points, or 0.51 percent, to 2,035.99. In Hong Kong, the Hang Seng index rose 0.74 percent in late afternoon trade. Chinese mainland markets moved little, with the Shanghai composite closing near flat at 3,025.48, while the Shenzhen composite gained 5.5 points, or 0.27 percent, to 2,005.59.
Initial reactions from analysts suggested they were somewhat disappointed by the BOJ's decision.