With Japan's economy officially out of technical recession, the Bank of Japan (BOJ) this week will likely shift focus back to inflation, analysts say, with markets paying particular attention to how Governor Haruhiko Kuroda will react to questions about price targets.
"The main point will be whether the Bank of Japan officially acknowledges a delay in its target date," said Deutsche Bank Chief Economist Mikihiro Matsuoka in a note. Although "the deadline for achieving the bank's price stability target has become somewhat ambiguous," he added.
The Bank of Japan launched an open ended and unprecedented quantitative easing program in April 2013, and expanded the scheme last October as the economy entered recession in the third quarter after two consecutive quarters of contraction.
Data released on Monday showed the economy emerging from recession, growing an annualized 2.2 percent in the fourth quarter, bringing some relief to markets.
Majority of analysts expect the BOJ to stand pat on monetary policy on Wednesday after a two-day meeting but the question remains if Kuroda will finally concede defeat in his quest for 2 percent inflation by the next financial year.