TOKYO (Reuters) - The Bank of Japan kept monetary policy unchanged on Thursday and maintained its view that the country's economy is gradually picking up, signaling its conviction that solid domestic demand will help a recovery resume without additional stimulus.
As widely expected, the central bank maintained its key policy rate in a range of zero to 0.1 percent by a unanimous vote, and held off on easing monetary policy further.
The BOJ fine-tuned its asset-buying and lending program, pledging to buy more short-term securities while reducing the amount it offers under fixed-rate market operations. It kept the total size of its asset-buying and lending program unchanged at 70 trillion yen ($879 billion).
In a quarterly review of its forecasts, the BOJ cut its core consumer inflation projection for the year ending next March to 0.2 percent from 0.3 percent expected in April. It maintained its forecast of 0.7 percent consumer inflation for next fiscal year.
BOJ Governor Masaaki Shirakawa will hold an embargoed news conference later on Thursday with his comments expected to come out some time after 4:15 p.m. (3.15 a.m. EDT).
The BOJ eased policy in February and April via increases in its asset-buying program in largely symbolic moves to show its determination to achieve its 1 percent inflation target.
The central bank issues long-term economic and price forecasts in a semiannual report in April and October of each year, and revises them in January and July.
($1 = 79.6600 Japanese yen)
(Reporting by Leika Kihara and Stanley White; Editing by Chris Gallagher and Michael Watson)