Genba also told reporters on Monday that it was important for the country to beat deflation.

Some analysts believe the central bank may ease monetary policy again to show its determination to beat deflation.

New Prime Minister Shinzo Abe has called for aggressive monetary easing and huge fiscal spending to beat deflation.

They also see a possibility of the central bank taking more measures to beat deflation and support the economy.

They fretted over the cost of prolonging a stimulus that was intended as a quick-hit solution to beat deflation.

He offered few clues on monetary policy, saying only that the BOJ needed to be proactive in taking steps to beat deflation.

ECONOMY - Compile a large-scale extra budget at the beginning of 2013 for seamless economic policy to beat deflation and boost the economy.

Government spending has temporarily risen because of shocks from the financial crisis and the earthquake, but needs a sustained boost to beat deflation.

Japan has not intervened in the currency market since 2004, when it ended a massive yen-selling campaign to beat deflation and a domestic banking crisis.

Japan's finance minister, Taro Aso, told reporters that the G7 had recognised its steps to beat deflation were not aimed at affecting foreign exchange markets.

He echoed Mr Noda's view that the yen's rapid rise is undesirable for achieving a self-sustainable recovery in the Japanese economy and beating deflation.

Abe has pledged to make his top priority beating deflation and taming the strong yen, which are dragging down the world's third biggest economy.

- Do the utmost to beat deflation in cooperation with the Bank of Japan based on the joint statement issued in October 2012.