Bank of Japan stands pat on monetary policy

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The Bank of Japan met analyst expectations on Thursday as it kept its level of monthly purchases steady and its assessment of the economy unchanged at the conclusion of a two-day meeting.

Members voted unanimously to maintain its policy of boosting monetary policy by 60 trillion ($615 billion) 70 trillion yen per year.

"Japan's economy is starting to recover moderately," the BOJ said in a statement, maintaining its assessment of the economy, which it revised upwards last month.

(Read more: Could Japan fall back into recession next year? )

However, the bank was more positive on inflation expectations, and said they were rising.

A proposal from BOJ member Takahide Kiuchi to make the current 2 percent inflation target more flexible by making it a medium to long term goal was voted down in an 8-1 vote.

Dollar-yen moved off a session low of 96.30 following the announcement, which triggered a 1 percent rally in the benchmark Nikkei index.

While the decision to hold fire was widely priced in by markets, some analysts felt the central bank's cautious stance might be a bit overdone.

(Read more: Should Kuroda be more like Draghi? )

"I have been disappointed about the way the BOJ's monetary policy has become so passive and that has been letting the yen go higher. So that's why the yen has been steady for the last few months and why it looks like the yen might not appreciate that much going forward," said Takuji Okubo, principal and chief economist at Japan Macro Advisors on CNBC Asia's "Cash Flow."

The bank unveiled the world's most aggressive quantitative easing program in April, when it promised to inject $1.4 trillion into its economy over the next two years, by purchasing government bonds and risky assets.

Since then, no new initiatives have been announced by the central bank.

(Read more: Sales tax hike is vital and will hurt Japan, says IMF )

"Buying assets is just a tool to achieve the means, such as lowering interest rates or making people happier about Japan's economic outlook. And I do think the BOJ is failing in controlling people's expectations now," Okubo added.

Focus now turns to the central bank's policy statement, due later this afternoon. Investors are hoping the BOJ will provide relief to markets by talking down the stronger yen, which makes Japanese export-reliant products less competitive in the global market.

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