The central bank is expected to leave ample cash in the system through next week to meet demand for companies to settle year-end payments, but analysts said it is tough to call how fast the BOJ will pare the current account balance, which is projected to hit a record 42.6 trillion yen on Thursday.
"The level will likely stay high until the fiscal year is over," said Naomi Hasegawa, senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.
If there were a renewed surge in cash demand in the coming days, the BOJ would respond, possibly pushing the account balance to 45 trillion yen, according to Toshiaki Terada, market economist with Totan Research in Tokyo.
BOJ's account balance more than doubled from its pre-quake range of 17 to 18 trillion yen.
Banks' deposits at the BOJ should decline after the Japan's fiscal year ends next week, analysts said.
Still there are seasonal factors in the beginning of the new year such as spring holidays and corporate tax payments, which could keep the BOJ from draining the emergency cash too quickly, Mitsubishi's Hasegawa said.
With cash sloshing around the banking system, the average overnight call rate has fallen to 0.08 percent, below BOJ's 0.10 percent target. It climbed to nearly 0.11 percent last Monday.
The London interbank offered rate on what banks charge each other to borrow yen overnight continued to move toward its levels before the devastating March 11 quake and tsunami.
It was fixed at 0.12250 percent, down from 0.12875 percent on Wednesday. It jumped to 0.49 percent last week, which was the highest since December 2008 during the global credit crisis.
As the risk of a liquidity crisis fades, analysts said the economic fallout from Japan's worst earthquake on record might not be as dire as initially feared.
Last week, traders had speculated that the cost of the earthquake and tsunami could push Japan into recession and crimp global growth.
"The analysis we are putting together suggests the impact on the Japanese economy is quite small so it shouldn't affect the rest of world," said Richard Jerram, head of Asian economics with Macquarie in Singapore.