Is the BOJ asleep at the wheel?

With Japan's economy on shaky ground, the country's central bank needs to take a page out of Federal Reserve's playbook and unleash fresh stimulus to save the fragile recovery from fizzling out, according to one strategist.

"What Japan is dealing with here is just dismal data, and it's a combination of a strong yen and consumption tax increase that we saw earlier in the year that have caused everything from retail sales to fall to the floor and inventories to spike," Joe Zidle, portfolio strategist at Richard Bernstein Advisors told CNBC on Friday.

"Japanese officials [should] start acting more like the Fed. If you see what happened in the United States over the last 3 or 4 years, every bout of weakness was met with things like quantitative easing and more stimulus measures," he added.

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This week, Japan released a slew of disappointing economic data, which has given rise to fears that the April sales tax hike could prove more damaging than initially thought.

Japan raised its consumption tax to 8 percent from 5 percent in April, the first increase in 17 years, as part of efforts to rein in mounting public debt.

Retail sales dipped 0.6 percent on an annual basis in June, slightly worse than the expected dip of 0.5 percent, as consumers held back on spending. Meanwhile, industrial output tumbled by a worse-than-expected 3.3 percent in June from a year-earlier as companies curbed production due to a pile-up in inventories.

At its most recent policy meeting on July 15, the Bank of Japan held off expanding its pledge to increase base money by 60-70 trillion yen ($582-$680 billion) per year via aggressive asset purchases, saying the world's third largest economy was recovering despite activity taking a hit from the sales tax hike.

On Friday, Kuroda defended his upbeat view on the economy despite the soft data and reiterated his readiness to expand stimulus if inflation faltered on the path to his 2 percent target rate by next year.

"Our question is: are Japanese authorities really aware of where they are? As you look at that data, it suggests that they haven't learnt from past mistakes," he said.

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The last time Japan lifted its sales tax to 5 percent from 3 percent in 1997, it resulted in the economy falling into recession shortly afterwards.

Martin Schulz, senior economist at Fujitsu Research Institute, says while the slowing economy is indeed a major headache for the central bank, further monetary stimulus may prove futile.

"The Fed has been reacting to one of the country's biggest financial crises in a long time, its goal was to re-balance the real economy in terms of household balance sheets, the housing market and the labor market," Schulz said.

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"In Japan, we have almost full employment; the labor market is comparatively tight. And, while household demand is not excessively weak either," he added.

In addition to this, Japanese corporates are holding back from investments due to factors such as the country's aging demographics, which cannot be addressed effectively through monetary stimulus, Schulz said.

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For the central bank to consider stepping on the gas again, it would likely first wait to see how the economy fared in the third quarter, keeping a close eye on imports, household spending and retail sales, which are all gauges of private demand.

"After being so expansionary last year, they won't react to intermittent changes in data for better or worse," he said.