The Bank of Japan was placed in an awkward position during the latest meeting of Group of Seven finance leaders in Palermo, Sicily.

BOJ Gov. Masaru Hayami claimed that Japan's economic recovery is intact, but it appears none of Japan's G7 partners took this claim at face value.

The G7 statement issued after the meeting said the finance ministers and central bank governors share the view that "prices continue to decline and downside risks remain" in Japan.