TOKYO -- The Bank of Japan on Tuesday kept its key policies unchanged and cut its inflation forecast for the next financial year, as price increases ease and recovery efforts continue after a devastating earthquake on Jan. 1.

After a two-day policy meeting, the central bank's statement retained language signaling its dovish bias. The BOJ vowed to guide short-term rates to minus 0.1% and 10-year rates to 0%, while maintaining its yield curve control (YCC) policy of allowing 10-year government bond yields to move up to around 1.0%. It stood pat on its policy of buying equities, real estate investment trusts and commercial bonds.