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, after a decision to hike them in July pushed the yen sharply higher and fuelled turmoil across world markets.

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.