Despite an encouraging Tankan survey and above-target inflation readings, recent media reports suggest that Bank of Japan officials are in no hurry to raise rates again, said Daiwa Capital Markets.

As such, the bank expects no change to the BoJ's policy rate
of 0.25% when the latest meeting concludes this week.

Japan's central bank is scheduled to release its policy statement on Wednesday at 9:30 p.m. ET.

After Japan's ruling coalition lost its majority in October's Lower House election to increase uncertainty about the direction of fiscal policy, BoJ policymakers might well prefer to await the FY25 budget announcements over the Christmas period, as well as further signals about the coming year's Shunto wage negotiations, before shifting policy again, noted Daiwa.

They might also be sensitive to uncertainty about the global political, economic and market environment, pointed out the bank.

However, Governor Kazuo Ueda will likely continue to leave the door open to further hikes in the coming year, perhaps with a move to coincide with the publication of updated macroeconomic projections in January, added Daiwa.