According to Sina Finance, Wells Fargo's Singapore-based chief Asia-Pacific strategist Chidu Narayanan said in a report that the Bank of Japan may raise rates at its September meeting, and if it keeps rates unchanged, the dollar-yen exchange rate could rise above 160.

If the Bank of Japan delivers a hawkish rate hike, Japan cuts the consumption tax, and the dollar weakens, the dollar-yen rate could fall to 157 by year-end and to 156 in the first quarter of next year. If the government adheres to fiscal prudence and limits subsidy spending, the yen could strengthen further, pushing the bank's forecast down to 155.

Narayanan said that if the Bank of Japan raises rates in September and discusses speeding up the pace of hikes, while expressing greater concern about inflation and possibly discussing a higher neutral rate, the market would view that as hawkish. After September, the base case is for the Bank of Japan to raise rates in January and June.