"The upgrade in the BOJ's consumption assessment shows it is becoming increasingly convinced that things are on track, with rising wages pushing up household income and spending," said Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities.

The Bank of Japan left its short-term policy rate unchanged Friday as it examines how the economy and markets are digesting its most recent interest-rate increase.

The BOJ kept interest rates at 0.25% after August's CPI showed a 2.8% increase, reflecting a cautious approach amid economic concerns.