The Bank of Japan Policy Board left its ultraeasy monetary policy unchanged Thursday.

It is taking a wait-and-see stance despite an ongoing economic recovery and a brighter outlook for the nation's economy.

After a two-day meeting, the nine-member board decided to continuously inject liquidity into the financial system to support the fledging recovery and fight deflation.

As a benchmark for the easy-monetary policy, the board decided unanimously to keep its target for the outstanding balance of commercial banks' deposits held at the central bank in a range between 30 trillion yen and 35 trillion yen.

If the market faces any risk of instability, the BOJ would pump greater liquidity into the financial system than the target, the central bank said.

"The nation's economy is gradually recovering," BOJ Gov. Toshihiko Fukui told a news conference. "But we are carefully watching the recent increase in oil prices because it might slow down the ongoing economic recovery."

Fukui said the nation's economy will probably stay on the recovery track, and cited the government's report earlier this week of 1.4 percent growth in gross domestic product during the January-March period.

In its economic outlook released in April, the BOJ predicted annual GDP growth between 2.9 percent and 3.5 percent for fiscal 2004.