Japan's central bank has ended its first board meeting of the year with a decision to keep its lax monetary policy and negative benchmark interest rate unchanged.

The Bank of Japan upgraded its forecasts for growth, though, citing signs the world's third biggest economy is gaining momentum despite recent weakness in consumption and investment.

The government reported Tuesday that industrial output rose in December, helped by strength in manufacturing of passenger cars and auto parts, though the 0.5 percent month-on-month increase was slower November's 1.5 percent expansion.

The central bank is pumping tens of billions of dollars a year into the economy through purchases of government bonds and other assets. The aim is to counter deflation and keep credit cheap, encouraging banks to lend and businesses to borrow more.