The Bank of Japan held off on expanding its stimulus measures, despite slumping exports and falling oil prices which may threaten its upbeat projection that the economy is on track to hit the bank's ambitious 2% inflation target next year.
But lingering fears of recession will keep the central bank under pressure to ease at a more crucial meeting on October 30.
It is then expected to cut its long-term economic and price forecasts, analysts say.
Bank of Japan Governor Haruhiko Kuroda remained bullish that the bank's massive money-printing will eventually lift the world's third-biggest economy decisively out of nearly two decades of deflation.
"The trend of consumer rises is rising steadily," he told a news conference after the bank maintained its pledge to increase base money at an annual pace of 80 trillion yen ($700 billion) through aggressive purchases of assets such as government bonds.
"There is absolutely no change to our stance that we will steadily implement quantitative and qualitative easing to achieve the 2% inflation target at the earliest possible time," he stated.
Kuroda said he expects to hit the inflation target around the six months from next April but that this could depend on oil prices, which have slumped sharply since mid-2014.
The Bank of Japan maintained its optimistic view that while exports and output have been hurt by slowing emerging market growth, Japan's economy continues to recover moderately.
Japan's economy shrank in the three months from April to June and some analysts expect another contraction in three months from July to September on slumping global demand and weak consumption.
Core consumer prices slid in August from a year earlier, the first drop since the Bank of Japan deployed its massive stimulus programme more than two years ago, casting doubt on whether heavy money printing alone can accelerate inflation to 2%.
In a semi-annual review of its forecasts on October 30, the bank is set to slash its economic growth forecasts and push back the timing for achieving its price target, sources say.
The Bank of Japan now expects inflation to hit 2% by around September next year, a forecast many analysts criticise as too ambitious.
A Reuters poll in early September, before the recent spate of weak data, showed most economists did not expect further easing until 2016.
