“The disappointing output figures indicate that the Bank of Japan’s view on growth is too optimistic,” Capital Economics said. “We still believe that the Bank will announce more easing at the late-April meeting.”

The BOJ last month raised its growth forecast for the fiscal year starting in April to 2.1 percent, with Governor Haruhiko Kuroda saying slumping oil prices will boost growth.

Kuroda also said the drop in oil could delay inflation reaching the BOJ’s 2 percent target next fiscal year, and some economists see a risk of prices falling briefly this summer.

?While the Bank of Japan is projected by economists to boost stimulus later this year, some officials inside the central bank think further monetary easing to shore up inflation would be a counterproductive step for now, according to people familiar with the talks. They are concerned it could trigger declines in the yen that damage consumer confidence.

Eoin Treacy's view

In the bad news is good news category, weak economic results increase the potential that additional stimulus measures will be enacted. The Yen has been unwinding an oversold condition relative to the 200-day MA since December but a sustained move below the 200-day MA would be required to question medium-term US Dollar dominance. 

The Topix Banks Index, which has been ranging for nearly two years, rallied today to test the upper side of its range. While some consolidation in this area is possible, a sustained move below the 185 area would be required to question medium-term scope for additional upside. 

The Topix 2nd Section Index has lost momentum somewhat following its late 2014 rally but a sustained move below the 200-day MA, currently near 4100, would be required to question medium-term upside potential. 

The Nikkei-225 broke out of a medium-term range in October and has been consolidating above it since. It found support in the region of the 200-day MA in January and a sustained move below the trend mean would be required to question medium-term upside potential.