The Bank of Japan began a two-day policy meeting Monday during which it is expected to consider revising its economic assessment upward for the second straight month.
The Policy Board is expected to hold the key interest rate steady at 0.1 percent. The central bank last cut its target rate for unsecured overnight call money in December, lowering the rate from 0.3 percent.
At its previous policy meeting on May 21 and 22, the BOJ raised its assessment of the economy for the first time in 34 months.
The BOJ had been saying that "economic conditions in Japan have deteriorated significantly." But the word "significantly" was dropped from the assessment in May due to emerging signs of improvement.
Since then, more upbeat indicators have emerged, with April industrial output data marking its second-highest increase, 5.9 percent, prompting the BOJ to consider upgrading the assessment again.