FXStreet (Mumbai) - The Bank of Japan today held its base money target steady. However, it expanded the range of assets it purchases. The policy target of increasing base money at an annual pace of 80 trillion yen ($655 billion) was not changed. The Bank of Japan however surprised markets by increasing purchases of exchange-traded funds (ETFs). The central bank will purchase ETFs at an annual pace of 300 billion yen ($2.45 billion). The objective is to prompt companies to raise wages and over all investment. The central bank also decided to lengthen the maturity of bonds it purchases. The average maturity of its JGB purchases will be changed to 7-12 years in 2016 from around 7-10 years at the end of this year. The BOJ kept its rates unchanged, matching broad market expectation. The BOJ Governor Haruhiko Kuroda at his post-meeting news conference clarified that the measures decided upon today were not monetary easing. The bank perceives a small improvement in the economy. Its belief that the economy is showing signs of recovery has been strengthened by the Q3 GDP data which was revised upward from the initial estimate which had showed the economy contracted 0.8 per cent in the third quarter. The rise in machinery orders recently reported as well as industrial production figures for October implies that economic activity has been recovering in the fourth quarter. Underlying inflation has been holding up. Kuroda pointed out that latest tankan survey showed companies were actually moving up their revenue plans. Considering the positives, Kuroda said "Today's steps aren't monetary easing because we don't see risks to the economy and prices as heightening or materialising.” Also, he does not see any risk of “economic and price conditions undershooting” the bank’s estimates. He believes there is no severe impact of the slowdown in emerging economies on Japan's economy. Neither is the slowdown “threatening achievement of our price target", he said. Showing confidence that the QQE has helped the economy, Kuroda said, “Companies and households are shifting away from a deflationary mindset.” He said he is willing to do everything possible to “broaden the positive momentum.” He admitted that there exists “discrepancies among sectors”. He said the measures were initiated to supplement QQE. Reiterating that quantitative and qualitative easing would continue as long as need the governor noted "Rather, we took these steps to ensure that we can continue with QQE smoothly or expand it if necessary to achieve 2 per cent inflation at the earliest date possible.” He refused to agree that the bond buying programme was seen reaching its limits. He stressed that with the execution of plans charted today the central bank wanted to make sure that “asset purchases push down yields across the curve.” He went on to further emphasize, “We thought it's desirable to take pre-emptive steps to ensure we can keep buying government bonds in a way that better meets the purpose of QQE." For more information, read our latest forex news.