The Bank of Japan has held off any extra monetary easing measures to boost its economy despite the US Fed’s huge stimulus but the Finance Minister said he would keep a “very close eye” on US policy.

The central bank – after a meeting brought forward to more quickly reply to the Federal Reserve announcement – instead gave details of plans to buy assets under a previously announced programme to inject cash into the economy.

The US Federal Reserve on Wednesday announced it would pour an additional $600 billion into the economy through Treasury debt purchases, to try to keep a fragile recovery moving and create jobs.

BoJ Governor Masaaki Shirakawa said later that his central bank and the Fed were not competing in monetary easing, but he added that expanding the size of asset purchases was “one leading option” if conditions deteriorate.

The bank’s downbeat report on the world’s number three economy said: “Japan’s economy still shows signs of moderate recovery, but the recovery seems to be pausing. Exports and production have recently been more or less flat.”

It said unemployment and income issues remained “severe”, although they had eased, while business fixed investment was showing signs of picking up.

On deflation, which has long hobbled Japan’s economy, the bank said prices were still falling “due to the substantial slack in the economy as a whole” but also said that the price drops had continued to slow.

The bank kept interest rates a rock-bottom zero to 0.1 percent.

It also said it had decided on the terms and conditions of its purchases of assets such as exchange-traded funds and real-estate investment trusts, to inject money into the economy and attempt to rein in the strong yen.

The purchases are part of a five trillion yen ($62 billion) asset-buying programme announced last month, and a wider policy of monetary easing worth 35 trillion yen.

The bank said it would buy assets “starting with government bonds at the beginning of next week and followed by the purchases of other assets, so that the effects of comprehensive monetary easing will quickly spread”.

Japan’s economic recovery has been hampered by a sluggish export sector, which has been hit by the strong yen, which is sitting at 15-year highs against the dollar.

The US liquidity injection, designed to boost growth and jobs, could also add to upward pressure on the yen. In a sign of Tokyo’s concern at the effect of the Fed’s move on the nation’s economy, Finance Minister Yoshihiko Noda said to say it was vital to keep a “very close eye” on US monetary easing.

“I believe that it is necessary for us to watch developments regarding the United States’ economic conditions and monetary policy closely,” Mr Noda said.

“We will continue to monitor the foreign exchange market with great interest and will take decisive steps when necessary.”