The Bank of Japan (BOJ) this morning left monetary policy unchanged but is expected to underscore the need for further interest rate rises.
The central bank's nine-member board voted unanimously to keep the overnight call rate target at a decade-high 0.5 per cent, as widely expected by financial markets.
In its semi-annual economic outlook report, due out at 3.15pm local time, the BOJ board members are expected to forecast steady consumer price rises and say the central bank will raise rates gradually to keep on top of inflationary pressures.
Analysts largely expect the central bank to wait until around July-September to raise the key target rate to 0.75 per cent.
Soft data today caught off guard some market players who had started to speculate this week that the BOJ could raise rates as soon as May or June if upcoming economic reports were strong.
The central bank has said that if the economy continues to expand, it will gradually push up wages through tighter labour market conditions, boosting overall prices.
But there hardly seems to be any inflationary pressure building at the moment.