The decision came as the central bank seeks to wean its economy off the long-held ultra-easy monetary policy and curb the yen's slide against the U.S. dollar.

The Bank of Japan left interest rates unchanged on Friday, but governor Kazuo Ueda said further hikes remain on the cards if the economy grows as predicted.

The Bank of Japan kept interest rates steady on Friday and revised up its assessment on consumption, signalling its confidence a solid economic recovery would allow the central bank to raise interest rates again in coming months.

The Bank of Japan unanimously maintained its key short-term interest rate steady at 0.25% by a unanimous vote, in line with expectations at its September meeting, after raising it in July. The central bank also maintained its outlook that the economy was progressing steadily towards a modest recovery.