The Bank of Japan (BOJ) cut its inflation outlook for the three years through fiscal 2020 on Wednesday as price gains have been slow and global trade frictions have weighed.

At the conclusion of the BOJ's two-day policy setting meeting, the board also opted to maintain both long and short-term interest rates at their current ultra-low levels and to continue its large-scale asset buying program.

The bank's inflation forecast in fiscal 2018 was cut from 1.1 percent expected in July to 0.9 percent and for fiscal year 2019 the BOJ lowered its forecast for inflation by 0.1 percentage point to 1.4 percent and for fiscal year 2020 by by 0.1 percentage point to 1.5 percent.

The latest changes will make the bank's lofty 2 percent inflation goal even harder to achieve, economists here said.

In terms of Japan's gross domestic product for the current fiscal year ending in March, the central bank downwardly revised its outlook for growth by 0.1 percentage point to 1.4 percent.

As a planned consumption tax hike for October 2019 approaches, with some market analysts concerned the hike may see Japan once again enter a recession as has been the case in the past, the BOJ said on Wednesday that it would keep its interest rates low for "an extended period of time" as a buffer for households and firms.

The central bank maintained its benchmark for the 10-year government yield at around zero percent and kept a short-term interest rate of minus 0.1 percent for some funds parked at the bank by financial institutions.

The BOJ also said it would continue to increase its holdings of government bonds at an annual pace of 80 trillion yen (707 billion U.S. dollars), and continue its purchases of assets like exchange-traded funds (ETFs).