USD/JPY will rise if the Bank of Japan fails to signal its rate hike intentions this week.

The BOJ is widely expected to leave its policy rate unchanged on Thursday, with the likelihood of a rate hike now under 20%. This marks a sharp decline from Nov. 29, when BOJ Governor Kazuo Ueda suggested that the timing for the next interest rate hike was "approaching."

The slide in expectations has been attributed to reports indicating that policymakers want to assess overseas risks and next year's wage outlook before making any moves.

One key risk, the Fed’s policy stance, will be clearer on Wednesday, with expectations of a cut followed by a cautious outlook to further moves.

Such moves could support carry trades into seasonal yen weakness if market volatility decreases.

Further clarity on Japan wages may not come until the BOJ's January meeting, but failure to solidify rate-hike intentions before then risks a deeper yen decline. There is currently only a 50% chance that the BOJ will raise rates in March.

Additionally, the appointment of Yoshinobu Tsutsui, Chairman of Nippon Life Insurance, as the new head of Japan's largest business lobby, Keidanren, may have currency implications. This is the first time Keidanren has selected a chairman from a financial institution, rather than a manufacturing entity, signaling potential shifts in the economic landscape influenced by yen and commodity price fluctuations.

Technically, USD/JPY is bullish above its 153.80 weekly cloud top with pair eyeing a key resistance zone at 154.70-155.

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(Robert Fullem is a Reuters market analyst. The views expressed are his own.)

((robert.fullem@thomsonreuters.com;))