Bank of Japan keeps policy steady, says economy recovering

Kiyoshi Ota | Bloomberg| Getty Images

Bank Of Japan Governor Haruhiko Kuroda

The Bank of Japan kept monetary policy steady on Thursday and revised up its assessment of the economy, encouraged by growing signs the benefits of its stimulus policy are broadening.

As widely expected, the BOJ voted unanimously to maintain its pledge of increasing base money, or cash and deposits at the central bank, at an annual pace of 60 trillion yen ($602 billion) to 70 trillion yen.

(Read more: Why the Bank of Japan is right to stay 'passive')

"Japan's economy is recovering moderately," the BOJ said in a statement, revising up its assessment of the economy. Last month, it said Japan's economy is starting to recover moderately.

BOJ board member Takahide Kiuchi proposed that the central bank make its 2 percent inflation target a medium- to long-term goal, and commit to intensive easing in the next two years. This would differ from the BOJ's current commitment to hit its inflation target in roughly two years.

(Read more: Could Japan fall back into recession next year?)

Kiuchi's proposal was rejected in an 8-1 vote.

BOJ Governor Haruhiko Kuroda will hold an embargoed news conference from 3:30 p.m. (0630 GMT) with his comments expected to come out any time after 4:15 p.m. (0715 GMT).

(Read more:Is Kuroda too 'in love' with his own policies)

The BOJ stunned markets by offering an intense burst of monetary stimulus in April, pledging to double the supply of money in two years by boosting purchases of government bonds and risky assets.