The BOJ, which has held its call rate unchanged since December 2008, said overseas economies remain in a deceleration phase and Japan's economy has been weakening due to soft external demand.
"With regard to the outlook, Japan's economy is expected to remain relatively weak for the time being, and thereafter, it will return to a moderate recovery path as domestic demand remains resilient on the whole and overseas economies gradually emerge from the deceleration phase," the BOJ said in a statement after a meeting of its policy board.
It added that inflation is expected to remain around 0 percent for the time being and there is still a high degree of uncertainty regarding Japan's economy, Europe's debt problem, the momentum of the U.S. economy, a sustainable growth path for emerging economies and "the spreading effects of the recent bilateral relationship between Japan and China."
The BOJ, which last month expanded its asset purchase program by 11 trillion yen to 91 trillion - its fourth expansion this year - repeated earlier statements that it would "pursue aggressive monetary easing in a continuous manner by conducting its virtually zero interest rate policy as well as steadily increasing the amount outstanding of the Asset Purchase Program."
Japan's economy contracted by 0.9 percent in the third quarter for an annual rise of 0.10 percent while consumer prices fell further in September. The annual inflation rate was minus 0.30 percent in September, the fourth month in a row with deflation.