TOKYO (AP) — The Bank of Japan has opted to keep its lax monetary policy intact, while noting signs of improvement in the world's third largest economy.

A BOJ statement issued Friday said it expects demand to accelerate, supporting a "moderate expansion." The central bank's key interest rate remains at minus 0.1 percent.

While the U.S. Federal Reserve is raising rates, Bank of Japan Gov. Haruhiko Kuroda appears determined to persist with a policy of "qualitative and quantitative easing" to help attain an inflation rate of about 2 percent.

The BOJ statement said inflation expectations in Japan remain in a "weakening phase," suggesting major policy changes are unlikely in the near future.

The central bank has injecting trillions of yen (billions of dollars) into the economy, seeking to spur demand and counter deflation.