Earlier this month the BOJ launched a new aggressive policy of "quantitative and qualitative monetary easing" to rid the country of 15 years of deflation by doubling the monetary base and buying over 7 trillion yen of Japanese government bonds a month along with purchases of real estate investment trusts (J-REITs) and Exchange Traded Funds (ETFs).
"At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:
"The Bank of Japan will conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen," the bank said in a brief statement, essentially keeping its policy stance unchanged.
As part of what the BOJ describes as its "new phase of monetary easing," the central bank will target the monetary base instead of the overnight call rate, effectively zero since December 2008.
It aims to increase Japan's monetary base to 200 trillion yen by the end of 2013 and to 270 trillion yen by the end of 2014 from 138 trillion at the end of 2012.
The BOJ's new aggressive easing stance is aimed at boosting inflation to the bank's new target of 2.0 percent "at the earliest possible time, with a time horizon of about two years," as the bank said in April.
Later today the BOJ will release its semi-annual outlook that will include an estimate of when the central bank projects inflation will reach this new target.
As part of its battle to defeat deflation, the BOJ has said it wants to boost inflationary expectations. It's current forecast is for core consumer prices to rise by 0.9 percent in the 2014/15 fiscal year that ends in March 2015.
Igniting inflation will clearly be an uphill battle for the BOJ as deflation has dominated Japan for most of the last two decades.
In March, Japan's core consumer prices fell 0.5 percent from the same month last year. The headline inflation rate in February was minus 0.7 percent, the 10th month in a row with falling prices.
Earlier this week the Organisation for Economic Co-operation and Development (OECD) estimated that prices excluding fresh food and energy will rise by about 0.5 percent in the final quarter of 2014.
Japan's Gross Domestic Product stagnated in the fourth quarter of 2012 from the third quarter following contractions in both the third and second quarters. On an annual basis, GDP grew by 0.5 percent, marginally above the third quarter's 0.4 percent.
But due to the BOJ's new easing, the OECD raised its growth forecast for 2013 to 1.4 percent, up from 0.7 percent, and for the economy to expand by the same 1.4 percent in 2014, up from a previous forecast of 0.8 percent.