The Bank of Japan said Tuesday it is holding its monetary policy steady, even as its peers in the U.S. and Europe begin to wind down stimulus.
The central bank said in a statement after its two-day meeting that it is maintaining the short-term interest rate at minus 0.1 percent and the target for the 10-year government bond yield at zero percent.
BOJ Governor Haruhiko Kuroda will hold a news conference at 3:30 p.m. local time (0630 GMT) to explain the policy decision.
In an outlook report accompanying the latest monetary policy statement, the BOJ said it is maintaining its forecast for inflation to hit 2 percent in the fiscal year 2019/2020. But it now expects core consumer prices to grow 0.8 percent in the fiscal year 2017/2018, lower than the previous projection of 1.1 percent.
Consumer prices are expected to be up by 1.8 percent in fiscal year 2018/2019, unchanged from the previous forecast, BOJ added.
With inflation in Japan remaining moderate, the country's central bank is in no hurry to tighten its monetary policy, analysts said before the release of BOJ's statement.
"We expect price pressures to strengthen only slowly and we therefore remain convinced that the Bank will be in no position to tighten policy anytime soon," Marcel Thieliant, senior Japan economist at Capital Economics, wrote in a note.
Thieliant, like the majority of analysts polled by Reuters, expected the BOJ to leave both the policy rate and yield target for 10-year government bonds unchanged until 2019.
Japan's economy has grown for six consecutive quarters with the momentum likely to sustain, but the country's 2 percent target for inflation remains elusive — core inflation was just 0.7 percent in September, according to official data.
"This Halloween, the BoJ will neither trick nor treat; just staying the course," economists at Mizuho wrote in a note.