The Bank of Japan hit a new milestone as its balance sheet topped 500 trillion yen ($4.48 trillion), roughly the same size as that of the Federal Reserve, having more than tripled since it started aggressive stimulus in 2013.

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But while the central bank reached a major milestone in money printing, it is nowhere near achieving the ultimate goal of its policy, to lift inflation to 2 percent, highlighting the difficulty the BOJ is facing as the pace of its bond buying appears unsustainable.

Data from the BOJ showed its total assets rose to 500.8 trillion yen at the end of May, compared to 425.7 trillion yen a year earlier. It was 164.8 trillion yen when Governor Haruhiko Kuroda took the helm in March 2013.

The BOJ`s balance sheet almost matches the $4.51 trillion held by the U.S. Federal Reserve and amounts to more than 90 percent of Japan`s gross domestic product (GDP), by far the highest ratio among the world`s top four central banks.

Despite such massive money-printing over years and signs of labour shortages in recent months, inflation stood at 0.3 percent and is expected to stay well below 2 percent for the foreseeable future.

Slowly improving economic growth has been largely reliant on a recovery in exports and global demand, with domestic consumer spending remaining stubbornly weak.

"At the moment, the world`s economy is in pretty good shape. As long as they have that tailwind, maybe there will be some progress little by little. But if the wind stops, there`s no traction," said Takehiro Noguchi, senior economist at Mizuho Research Institute.

"In a way, the BOJ is a like a yacht without an engine. It can advance only when there is a wind."

Buying large amounts of Japan government bonds is expected to become increasingly difficult as the central bank already owns more than 42 percent of the entire JGB market.

Indeed the data also showed the pace of the increase in BOJ`s JGB has slowed considerably in recent months.

At the end of May, its holding was up 70.7 trillion yen from a year earlier, more than 10 percent below the BOJ`s official guideline of an annual increase of 80 trillion yen and the slowest pace of increase in more than two years.

Most analysts expect the BOJ to slow the pace further to around 60 trillion yen by the end of year and to omit its pledge to increase its JGB holding by 80 trillion yen a year from its policy statement at some point.