Bank of Japan, the country’s central bank, has decided to keep its all-time low interest rates unchanged, an announcement that was made on Thursday, as the bank tries to fight off stubborn deflation in the second largest economy of the world.

Facing immense political pressure to not put an end to stimulus measures too soon, the Bank of Japan managed to hold its benchmark interest rate stable at 0.1%, where it has been since December of 2008, while stressing that beating deflation has been a "critical challenge".

"Japan's economy is picking up mainly due to various policy measures taken at home and abroad, although there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand", the bank said.

"The Bank recognizes that it is a critical challenge for Japan's economy to overcome deflation and return to a sustainable growth path with price stability. In the conduct of monetary policy, the Bank will aim to maintain the extremely accommodative financial environment", it added.

No suggestions about its future policies have been made by BoJ.