Wells Fargo is recommending that clients sell the Japanese yen against the US dollar ahead of the Bank of Japan's upcoming policy decision, arguing that the central bank is unlikely to meet, let alone exceed, the market's hawkish expectations.

"We remain skeptical that the BOJ can be more hawkish than the aggressive tightening path already priced in by the markets," wrote Chidu Narayanan, Asia-Pacific Macro Strategy Head, in a research note. Market pricing currently implies a 25-basis-point rate hike at every single meeting through July 2027.

"The bar for the BOJ to meet these expectations is high, and the hurdle to surpass them is even higher," Narayanan added.