The Bank of Japan looks set to announce another round of stimulus.
Data released on Friday showed consumer prices in May fell at their sharpest pace since 2013, delivering another blow to the central bank's efforts to goose an economy that has struggled to muster inflation for nearly three decades.
Japan's core consumer prices fell 0.4 percent in May from a year earlier, government data showed on Friday.
The core consumer price index, which includes oil products but excludes fresh food prices, matched economists' median estimate for a 0.4 percent annual decline.
Business statement meanwhile stayed flat, although the survey was conducted before last week's referendum in the U.K. where voters decided to leave the European Union (EU).
The soggy economic data comes in the backdrop of a sustained rise in the Japanese yen, which has risen sharply against peers after skittish investors piled into assets perceived to be safe after the uncertainty following the U.K. referendum.
The dollar/yen par was trading around 103 Friday morning in Asia, down from 111 at the end of May.
So far, Japan has refrained from directly intervening in the yen, which would contravene agreements with its Group of 7 partners to avoid unilateral action in the currency market, but the BOJ may do so if dollar/yen drops below 100, Capital economic's senior Japan economist, Marcel Thieliant, told CNBC's "The Rundown".