The Bank of Japan kept its monetary policy unchanged as widely expected on Thursday, after the U.S. Federal Reserve resorted to further easing.

The Policy Board of the BoJ voted 7-2 to maintain interest rate at -0.1 percent on current accounts that financial institutions maintain at the bank.

The bank said it will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

Further, the bank will purchase JGBs in a flexible manner so that their outstanding amount will increase at an annual pace of about JPY 80 trillion.

The bank said it will reexamine economic and price developments at the next monetary policy meeting in October, when it updates the outlook for economic activity and prices. The bank repeated that it will not hesitate to take additional easing measures if needed.

It is worth recalling that the Bank made similar pledges in 2016 amid concerns over China's economy, but never followed through on them, Marcel Thieliant, an economist at Capital Economics, said.

Since then, concerns over the impact of looser policy on the health of banks have intensified. As such, the BoJ will keep its interest rate targets unchanged over the coming year, the economist noted.

Regarding economic outlook, the BoJ said Japan's economy is likely to continue on a moderate expanding trend, despite being affected by the slowdown in overseas economies for the time being.

Further, the bank said it is necessary to pay closer attention to the possibility of losing momentum towards achieving the price stability target.

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