The Bank of Japan kept monetary policy steady on Thursday as expected but offered a stronger signal it may cut interest rates in the future, underscoring its concern that overseas risks could derail the country's fragile economic recovery.
The decision came hours after the U.S. Federal Reserve lowered rates again on Wednesday but signaled a pause in further cuts unless the economy took a turn for the worse.
The BOJ, which has far less policy ammunition, kept its short-term rate target at minus 0.1 percent and that for the 10-year government bond yield at around 0 percent.