The Bank of Japan is likely to leave policy unchanged at its October policy meeting, but is expected to lay the groundwork for a rate hike in December.

The Bank of Japan is widely expected to maintain the status quo at its October policy meeting, and attention is turning to the course of policy going forward.

USD/JPY was trading around ¥158 as of Tuesday during Asian hours. Although another rate hike this month is considered unlikely, the Bank is expected to lay the groundwork for a rate hike later this year.