However, with the core consumer price index dipping 0.1% year-over-year, the Bank of Japan may have room to enact more aggressive policies to hit its 2% inflation target.

“It was quite an interesting inflation report today. Core consumer prices dropped 0.1 percent in August, turning negative for the first time since April 2013 but consumer inflation excluding food and energy costs were slightly ahead of expectations. So even though we saw some inflationary pressure, the BOJ is likely to step up its QQE program in its October meeting,” IG market analyst Angus Nicholson told CNBC.

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Max Chen contributed to this article.