The Bank of Japan on Wednesday kept its key interest rate at 0.1 percent as expected but refrained from ending corporate support measures because of the high downside risks to the economy.
But the BOJ also upgraded its assessment of the economy, noting that public works spending is on the rise and exports and production are picking up.
"Japan's economy has started to pick up," the BOJ said in a statement, improving its assessment from last month, when it said conditions were "showing signs of recovery."