Goldman Sachs Research previews next week's July BoJ meeting.

"The Japanese economy is recovering moderately in line with the BOJ's outlook. Although price trends are currently somewhat weak, we expect rising upstream costs to spill over to consumer prices going forward. Under these circumstances, in its July Outlook Report, we believe the BOJ is likely to maintain its broad scenario that the economy will continue to grow moderately albeit at a decelerated rate, and that CPI inflation will increase due to higher crude oil prices, but will subsequently decline as the impact of higher crude oil prices wanes," GS notes.

"However, with crude oil prices lower than when the April Outlook Report was published, we expect the BOJ to raise its growth forecasts and lower its price forecasts slightly in the July Outlook Report. We believe the BOJ will maintain the status quo at the July meeting, and continue to expect the next rate hike in January next year," GS adds.