Japan's inflation ticked higher in March, coming in slightly above expectations, offering a small sign of progress in the Bank of Japan's (BOJ) two-year-long effort to kick start the long-moribund economy.
"Inflation may not fall into the negative over the next few months after all," Koichi Fujishiro, a senior economist at Dai-ichi Life Research Institute (DLRI), told CNBC.
Japan's core consumer price index (CPI) for March rose 2.2 percent from a year earlier, topping expectations for a 2.1 percent rise from a Reuters poll. Excluding the effects of the consumption sales tax hike in April 2014, the nationwide consumer price index (CPI) rose 0.2 percent, above expectations for a 0.1 percent rise. It was flat in February for the first time since May 2013.
In the country's capital, Tokyo's core CPI for April rose 0.4 percent from a year earlier, slightly below the 0.5 percent forecast in a Reuters poll.
On Thursday, the BOJ kept in place its massive easing program of purchasing 80 trillion yen ($670 billion) worth of assets annually, although it lowered its forecast for fiscal 2015 inflation to 0.8 percent from its 1.0 percent projection in January. The BOJ pushed its target date for reaching 2 percent inflation back to the first half of fiscal 2016; the original target was around fiscal 2015.
Analysts have been projecting that the central bank will need to increase its asset purchases as the economy and inflation remained stubbornly stalled.
"The numbers point to the Bank of Japan shelving any additional easing, perhaps until at least early next year," said Fujishiro.