JP Morgan likes short USD/JPY exposure into September BoJ meeting.

"Fed was a small hawk but did little to change view in USDJPY; much more important will be the BoJ tonight and the local flow picture. There was evidence enough that Ueda was at least trying to be more hawkish so now that he has had more time to prepare for this meeting - given all the hype - it will be interesting to see how he delivers the presser, for me anything that suggests we are good to keep the newly priced quarterly cadence is positive JPY," JPM notes.

"Given how well priced the meeting is, the more likely surprise here is that they go 50bp rather than unchanged. JPY longs continue to get cut at pace by DHF who are almost back to flat on the month (when USDJPY was 159) meanwhile more evidence of modest local RM demand in our franchise overnight. In other news Takaichi’s cabinet reshuffle was pretty muted and contained no market- relevant victims. Stay short USDJPY," JPM adds.