The Bank of Japan is widely expected to keep its ultraeasy monetary policy unchanged at its two-day policy meeting from Thursday, but financial markets are set to scrutinize any change in its messaging on inflation and the yen's rapid decline — a byproduct of the BOJ's dovish stance.

The Policy Board is holding its first meeting since Japan's core consumer inflation topped 2% for the first time in about seven years in April, exceeding the BOJ's inflation target. The gathering also comes after BOJ Gov. Haruhiko Kuroda drew fire last week for saying that households had become "tolerant" of rising prices, a remark he later retracted as "inappropriate."

The BOJ faces a delicate balancing act between justifying its continued retention of monetary easing and taking heed of criticism that it is out of touch with consumers, analysts say.