Japan's central bank on Thursday kept benchmark interest rates steady at 0.5% in its first meeting after Sanae Takaichi took power as the country's prime minister earlier this month.

The decision was in line with expectations from economists polled by Reuters, and comes even as inflation has stayed above the central bank's 2% target for 41 months in a row.

The Bank of Japan said the decision was split 7-2, with board members Naoki Tamura and Hajime Takata proposing a 25 basis point hike.

Market reaction to the expected decision was relatively muted, with Japanese 10-year bond yields little changed, the yen 0.2% weaker at 153.03, while the Nikkei stock index was up 0.4%.

Krishna Bhimavarapu, APAC Economist at State Street Investment Management, said in a note after the decision that

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