Japan's central bank maintained its monetary stimulus on Friday and upgraded its view on consumption.
The Bank of Japan policy board, led by Governor Haruhiko Kuroda, voted 7-2 to retain the central bank's target of raising the amount of outstanding Japan government bond holdings at an annual pace of about JPY 80 trillion.
The BoJ board also voted to retain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.
The central bank will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.
The bank said the Japanese economy is "turning toward a moderate expansion." The bank viewed that overseas economies have continued to grow at a moderate pace on the whole.
Private consumption has increased its resilience, the bank added, suggesting a slight upgrade from its April assessment.
Regarding the outlook, the BoJ said Japan's economy is likely to continue its moderate expansion.
"Domestic demand is likely to follow an uptrend, with a virtuous cycle from income to spending being maintained in both the corporate and household sectors," the bank said.
The BoJ forecast inflation to continue on an uptrend and rise toward 2 percent, mainly on the back of an improvement in the output gap and rising inflation expectations.
In the light of weak price pressures, Capital Economics economist Marcel Thieliant said the BoJ is likely to leave both its yield target and its policy rate unchanged for the foreseeable future.
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