The Bank of Japan is expected to sit tight at its two-day policy meeting this week due to uncertainties over the domestic political situation and the effects of U.S. tariffs.

It is seen sticking with its wait-and-see approach even as inflation remains above 3% and households become more restive with price increases outpacing wage gains.

The bank's policy rate is currently set at 0.5% and has been kept at that level since January.