The Bank of Japan (BOJ) on Wednesday kept its massive monetary stimulus intact, as widely expected, reiterating that the world's number three economy is recovering moderately.
By an 8-1 vote at the end of a two-day meeting, policymakers maintained their pledge to boost monetary base by 80 trillion yen a year through purchases of government bonds and risky assets, a quantitative easing (QE) program that's been in place since April 2013.
Board member Takahide Kiuchi was the lone dissenter, proposing that the BOJ slash its asset purchases to 45 trillion yen a year, but was turned down by a majority vote.
Dollar-yen fell on the news, trading at 119.99 from 120.14, while the Nikkei 225 index rose 0.8 percent to a 15-year high of 19,810.
In an accompanying statement, the BOJ said consumer inflation, excluding the sales tax hike that came into effect last year, currently hovers at zero percent and will remain that way for a while on the back of a collapse in oil prices.
The BOJ has a target of boosting consumer inflation to 2 percent by the end of the current fiscal year, a goal that seems ever more remote with consumer prices staying flat after a brief period of rises last year.
Many analysts have tipped the BOJ to expand its QE program to provide further support to economy, which is struggling to recover from a recession last year, but others argue there's a limit to how much monetary stimulus can help.
"I rather hope the BOJ not ease at the moment. What Japan needs is more real income growth, productivity improvement as well as structural reform, and it's not clear to me how quantitative easing can change those things," said Alexander Treves, head of Equities, Japan at Fidelity Worldwide Investment.
Mr Yen: BOJ is done for now
According to Eisuke Sakakibara, Japan's former Vice Finance Minister and professor at Aoyama Gakuin University, the BOJ won't be easing further any time soon.
"I think Mr Kuroda is quite satisfied with the status quo. He has implemented quite aggressive easing of monetary policy. Since then, yen has depreciated and equity prices have risen, and growth rate is quite reasonable," Sakakibara told CNBC following the BOJ decision.
He concedes that the 2 percent consumer target seems ambitious, but says Kuroda won't back down from the goal.
"2 percent target is difficult to achieve at this moment. But the reason for that is the very substantial decline of oil price: it used to be around $100 per barrel, now it's $50. Mr Kuroda does recognize that. I talked to him about a week ago, while he won't change the target of 2 percent, 1 percent inflation is satisfactory for him," Sakakibara said.