The bank's nine-member policy board unanimously decided to "continue with quantitative and qualitative monetary easing" to achieve a 2 percent inflation target in two years, the bank said on its website.
"Japan's economy is recovering moderately" and overseas economies "as a whole are gradually heading toward a pickup," the bank said.
Japanese exports, business investments and profits have been generally increasing, it said.
"Public investment has continued to increase and housing investment has also increased," the bank said.
The monetary easing policy, begun in April, is aimed at doubling the monetary base to achieve the targeted 2 percent inflation target. Under the policy, the bank will conduct market operations at an annual pace of about 60 trillion to 70 trillion yen (about $600 billion to $700 billion).
The bank said the country's economy is expected to "continue a moderate recovery" and the year-on-year rate of increase in the consumer price index is likely to rise gradually.
Japan's consumer prices excluding fresh foods rose 0.8 percent in August from a year earlier. It was the third straight monthly increase in gasoline and other energy prices.
2014: NFL Cheerleaders [PHOTOS]
GM recalls 221,000 Cadillacs and Impalas