ANZ Research previews this week's September BoJ meeting.

"Looking ahead, a 25bp hike is widely expected. The primary focus will be on the Bank of Japan’s forward guidance. Given that markets are pricing in approximately 90bp of additional hikes, we believe it will be difficult for the BoJ to adopt a stance that is more hawkish than current expectations. We therefore maintain a modestly positive view of USD/JPY and expect the pair to move towards 155–156. If the BoJ’s commentary is particularly hawkish and brings forward additional hikes currently priced out, potentially at intervals shorter than quarterly, the pair could remain near current levels," ANZ notes.

"Two other scenarios appear less likely in our view. A 50bp (outsized) hike, as implied by BoJ member, Hajime Takata, in recent commentary, would likely push USD/JPY towards 150. Conversely, if the BoJ leaves rates unchanged at this meeting, we expect the pair to retest 160 and potentially move higher," ANZ adds.