"The Japanese economy is in a slight slump," said Susumu Kato, chief economist at Calyon, adding that he expected capital spending, which had been a key driver of Japan's growth, to go through some adjustments.
Japan's core private-sector machinery orders, which exclude those for ships and machinery at electric power firms, rose 5.5 percent in April, beating economists' consensus forecast for a 3.2 percent rise, government data showed on Tuesday.
The dollar jumped to a three-month high against the yen and U.S. Treasuries tumbled after Bernanke said the recent rise in oil prices was adding to inflation risks, fuelling speculation that U.S. rates would be heading higher.
Economists said that as central banks around the world increasingly express concerns over inflation, the BOJ, which dropped a tightening bias in late April amid growing economic uncertainty, will be forced to scrutinise its stance.
"The BOJ will be questioned if it can just focus on economic uncertainty at home and abroad," said Calyon's Kato, noting that Japan's real interest rates were negative given around 1 percent consumer inflation and the BOJ's policy rate of 0.5 percent.
"I think the BOJ will keep interest rates unchanged this week, but we will watch what BOJ Governor (Masaaki) Shirakawa has to say about inflation," he said.
Economics Minister Hiroko Ota said the world's second-largest economy was at a stage where caution was needed, but said it was too early to conclude Japan was in a recession.
"Capital expenditures are somewhat weakening as rises in crude oil and commodity prices are hurting corporate revenues," Ota told a news conference after a cabinet meeting.
Capex Seen Soft
The slightly bigger-than-expected rebound in April core machinery orders followed an 8.3 percent drop in March and a 12.3 percent decline in February.
Orders are seen falling 10.3 percent for the April-June quarter, underscoring the view that corporate investment will remain soft in coming months.
Capital spending has been a pillar of Japan's expansion cycle since 2002, but economists have worried that it could sputter as business expenditures are showing signs of losing steam.
In the first quarter, firms cut capital spending by 0.9 percent from the previous quarter, marking the first drop in three quarters.
The machinery orders data comes a day before the release of revised gross domestic product figures for January-March, due out at 8:50 a.m. on Wednesday.
The data will likely show Japan's GDP grew 0.9 percent from the previous quarter, against an initial reading of 0.8 percent, according to a Reuters poll.
Japanese firms are feeling the pinch from surging energy and raw materials costs and facing risks of a pronounced slowdown in the United States -- a main destination for Japanese exports.
The BOJ is expected to keep interest rates on hold at 0.5 percent when its policy board meets on Thursday and Friday.
At its meeting in late April, the BOJ gave up a two-year bias towards monetary tightening, as rising energy, food and other raw materials costs have hurt Japanese companies and consumers.