A lack of action from the Bank of Japan may not be what the markets want, but some analysts argue that a consistent central bank is exactly what the markets need right now.
The bank voted to maintain its pledge of increasing base money unchanged at an annual pace of 60 trillion to 70 trillion yen ($600-700 billion) on Thursday, and said Japan's economy is starting to "recover moderately," using wording not used by the bank since January 2011, Reuters reported.
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"You want consistency, you don't want erratic movement. They will double the balance sheet, they will continue to pump up liquidity and things are going well, so stay the course," said Jesper Koll, head of Japanese equity research at JPMorgan Securities in Japan.
The Nikkei 225 traded down 0.6 percent immediately after the announcement, but Koll said the dip was a short-term reaction.
"In the short-term there are some traders that will be disappointed by this, but earnings are going to be very good in Japan. The next results season starting in a couple of weeks is going to be spectacular and that's where the Nikkei is likely to catch a bid again," he added.
The Nikkei ended Thursday up 0.39 percent at 14,472.
Since Abe first started talking about his plans to revive the Japanese economy back in mid-November, via a three pronged approach involving aggressive monetary policy, fiscal stimulus and structural reform, the Nikkei has risen around 65 percent to date, while the yen has depreciated roughly 23 percent.
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All eyes are now on Prime Minister Shinzo Abe's much anticipated implementation of the third arrow, or structural reforms, after the upper house of parliament elections on July 21.
"It is the third arrow and the specifics on the structural reform that will drive the market further and also the results of the upcoming elections," Clay Carter head of international equities at Perennial Investment Partners said.
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"This grand experiment is multi-year so from an investor standpoint we can be a bit patient. We need to have a few more questions answered over time," he added.
The last time the bank took bold action at a policy meeting was back in April when it first announced plans to pump $1.4 trillion in stimulus, in a bid to help the economy out of 15 years of deflation.
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The central bank made slight downward revisions to its gross domestic product (GDP) growth forecasts. Growth for this fiscal year ending March 2014 was forecast at 2.8 percent, down from 2.9 percent, next year's was forecast at 1.3 percent, down from 1.4 percent, and 2016 at 1.5 percent, lower than the 1.6 percent forecast in April.
The Bank of Japan made no major changes to its target of reaching 2 percent inflation by March 2016. It said it saw 0.6 percent inflation for the fiscal year to 2014, down from a previous forecast of 0.7 percent, and 1.3 percent for fiscal year to 2015, down from 1.4 percent previously.
Board member Takahide Kiuchi's proposed that the central bank change its inflation target to a medium to long term goal and commit to intensive easing in the next two years but his proposal was rejected 8 to 1, according to Reuters.
—By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie