The Bank of Japan kept monetary policy steady on Tuesday, holding fire until a more thorough assessment of the economy at another rate review in two weeks that may show further action is needed to nudge inflation up towards its 1 percent target.

As widely expected, the central bank maintained its key policy rate at a range of zero to 0.1 percent by a unanimous vote.

The BOJ kept its assessment of the economy roughly unchanged, saying that while economic activity has remained more or less flat it has shown some signs of picking up.

Governor Masaaki Shirakawa will hold an embargoed news conference with his comments expected to come out sometime after 4:15 p.m. (0715 GMT).

The BOJ also announced details of a new dollar lending arrangement established as part of measures to boost Japan's potential growth.

Financial institutions can tap the loans offered by the BOJ at the six-month dollar LIBOR rate, with a duration of one year. The loans may be rolled over up to three times.

The deadline for applications for the new loans was set at March 2014.

(Reporting by Leika Kihara and Rie Ishiguro; Editing by Edmund Klamann and Michael Watson)

Inflation Bank of Japan Japan