The Bank of Japan kept its benchmark interest rate steady and said it will set out plans for reducing the amount of its bond buying at its July meeting while leaving purchases unchanged until then.

Authorities kept the benchmark rate in a range between 0 and 0.1% in line with a consensus forecast from economists surveyed by Bloomberg. 

The yen weakened against the dollar following the BOJ announcement as traders responded to the delay in reducing bond purchases and the lack of detail for now on the central bank's plans.

The move to reduce bond buying is the latest indication of Governor Kazuo Ueda's determination to gradually normalize policy after more than a decade of massive stimulus, but the delay points to lingering cautiousness on the board. Since formally ditching the bank's control of government debt yields in March, Ueda has said that buying bonds is no longer a monetary policy tool for the BOJ.

The central bank said its plan for bond buying reductions would cover a period of about one to two years.

Friday's BOJ decision comes days after Fed officials dialed back their expectations for interest-rate cuts this year, in a move that weighed on the yen. 

Ueda will elaborate on Friday's decision and the latest inflation outlook in an afternoon press conference that begins at 3:30 p.m.

Source : Bloomberg