Bank of Japan's monetary authorities are seen confident to achieve the price stability target of 2% Y/Y facilitated by current asset purchase program that seeks to increase the monetary base by ¥80 trillion annually. Although ultra-lenient monetary policy is expected from BoJ in the near future, further stimulus in the form of quantitative easing is not much likely.

According to policymakers, inflation is expected to reach the target between October 2016 and March 2017. The second hike in the consumption tax rate from 8% to 10% is expected to raise inflation temporarily, while the price pressures will remain more subdued until April 2017.

Even though the core inflation excluding food and energy had increased to 0.9% Y/Y, the November Headline inflation remained low at 0.3% Y/Y.

"The headline rate to accelerate gradually to 1.0% by the end of 2016"- Scotiabank