Japan's central bank on Tuesday kept its key rate unchanged between zero and 0.1 percent and raised its growth assessment for fiscal 2010 to 3.3 percent, from an earlier forecast of 2.1 percent.
The BoJ also maintained its earlier forecast that consumer prices would continue falling until fiscal 2011, when it predicts the core consumer price index, excluding volatile food items, to rise 0.3 percent versus an earlier forecast of a 0.1 percent rise.
It maintained its October CPI projection for the fiscal year starting in April 2012 at 0.6 percent in the view that the economy will gradually overcome deflationary pressures that have dragged on growth.
"The bank's baseline scenario predicts that Japan's economy is expected to gradually overcome the deceleration in the pace of improvement and return to a moderate recovery path," the BoJ said in a statement.
"The growth rate of the global economy is likely to start increasing again, led by emerging and commodity exporting economies."
