The Bank of Japan kept its short-term policy rate target unchanged at negative 0.1% and pledged to continue purchasing sovereign bonds to keep 10-year yields at around zero percent.
The central bank expects to maintain policy rates at their current "extremely low levels" for an extended period of time, while continuing to monitor uncertainties in the Japanese economy and prices, including the impact of a planned sales tax hike in October.
The BoJ expects the Japanese economy to continue growing moderately despite the effects of slowing economies abroad on exports and production. Exports are projected to "show some weakness for the time being" but are still expected to increase moderately, while domestic demand is expected to improve.
Annual inflation in the country is projected to increase gradually to the central bank's 2% target.