The Bank of Japan began its 2-day policy meeting on Wednesday. Investors will be keeping an eye on the outcome, with many anticipating the central bank will keep its key interest rate unchanged.

Policymakers are expected to be looking at the latest economic trends.

They've been closely monitoring the state of the American economy as they consider future rate hikes. Key indicators out of the United States have recently beat estimates.

Governor Ueda Kazuo last week said that "optimism over the US economic outlook appears to be broadening somewhat." He added that the bank has "ample time" to analyze the situation.

Some market watchers say the recent political change in Japan could also affect rate hikes. They believe it may hinder the BOJ from tightening policy.

The ruling coalition lost its Lower House majority in Sunday's general election, with the opposition seeing significant gains.