The Bank of Japan (BOJ) did as expected and left its policy unchanged on Tuesday at the conclusion of its two-day policy meeting.
The central bank maintained the negative 0.1% interest rate imposed on banks for some excess reserves, left the 10-year Japanese government bond (JGB) yield target at around zero, and kept annual rises in JGB holdings at 80 trillion yen ($676.9 billion U.S.).
The BOJ also upgraded its economic assessment, revising up its views on exports and output, while noting that the economy continued to recover moderately.
Indeed, a string of positive data has bolstered sentiment surrounding the world's third-largest economy.
The yen's 15% decline against the greenback over the past three months has boosted November export volumes, which hit a two-year high, and brightened the outlook for manufacturers, as revealed by the central bank's December Tankan survey last week.
Moreover, while inflation remains well below the government's 2% target, the outlook has significantly improved. Large expenditure on public work projects, a part of August's 28.1-trillion-yen fiscal stimulus package, is anticipated to support economic growth from the beginning of 2017 and in turn, prop up inflation.
