TOKYO (REUTERS) - The Bank of Japan kept monetary policy steady and maintained its upbeat assessment of the economy on Friday, signalling its conviction that inflation will hit its 2 per cent target without additional monetary stimulus.

As widely expected, the BOJ reiterated its pledge to increase base money, or cash and deposits at the central bank, at an annual pace of 80 trillion yen (S$870 billion) through purchases of government bonds and risky assets.

The policy board made the decision by an 8-1 vote. "Japan's economy continues to recover moderately," the central bank said in a statement.

It also said it will cut the number of policy-setting meetings to eight each year, from the current 14.

BOJ Governor Haruhiko Kuroda will hold a news conference at 3:30 p.m. (0630 GMT) to explain the policy decision.

The BOJ has left policy unchanged since expanding stimulus in October last year to prevent slumping oil prices, and a subsequent slowdown in inflation, from delaying a sustained end to 15 years of deflation.