The Bank of Japan is widely expected to leave its ultraloose monetary policy unchanged at its regular two-day policy meeting from Wednesday as it sees a recent pickup in inflation as transitory.
Facing the risk that staying the course would accelerate the yen's depreciation, Gov. Haruhiko Kuroda is being pressed to explain the rationale behind the BOJ's decision amid growing concerns that the weaker yen is exacerbating the pain for resource-poor Japan by boosting import costs.
Financial markets are looking for any change in how the BOJ sees the yen's weakness after the currency plunged to 20-year lows, reflecting the widening policy divergence between the BOJ and the more hawkish U.S. Federal Reserve.