The Bank of Japan kept its key short-term interest rate at -0.1%

Also bank maintained long-term borrowing costs around zero during its June meeting, but increased the size of its lending packages for cash-strapped firms to $1 trillion from about $700 billion announced last month aimed at mitigating the negative impact of the pandemic.

The central bank made no major changes to a range of programs it has launched to deliver money via financial institutions into companies faced with plunging sales due to the pandemic.

Policymakers maintained the optimistic outlook for the economy, saying activity is expected to resume gradually supported by accommodative financial conditions and the government's economic measures, but said the central bank stands ready to ease policy again if needed.