Markets are betting the greenback will climb, but now is the time to go short, said Adrian Zuercher, UBS' head of asset allocation for Asia.
The dollar was boosted by Fed comments that kept alive market expectations for a faster pace of U.S. interest rate hikes next year.
Japan's central bank will hold interest rates where they are and offered an upbeat view of the economy, report "Worldwide Exchange's" Wilfred Frost.
The Bank of Japan left policy unchanged on Tuesday at the conclusion of its two-day policy meeting, as widely expected.
Asian shares traded mostly higher on Tuesday with the exception of mainland China and Hong Kong markets weighed by continued yuan weakness.
Daiju Aoki, chief Japan economist at UBS WM, weighs in on the BOJ's latest policy announcement.
In September, expectations were high for a fresh round of easing. Fast forward to year-end and stimulus hopes have been postponed.
However, the Bank of Japan could also increase its QQE buying program, says Gavin Parry at Parry International Trading.
Japan needs to tackle deflation, says Masakazu Takeda at the Hennessy Japan Fund.
Favorable economic conditions and the weak yen mean that the BOJ is likely to be on hold, says Kazuo Momma at the Mizuho Research Institute.
The yen jumped on Monday on safehaven bids following news the Russian ambassador to Turkey was gunned down in the Turkish capital.
Asian markets started the week on the back foot, with the Japanese benchmark snapping 11-straight session of gains.
Asian shares flip-flopped on Wednesday with markets cautious ahead of what is expected to be the Federal Reserve's first rate hike in a year, with comments on the outlook key.
Japan's government bond yields have climbed and may be headed even higher, but the yen wasn't likely to follow suit, analysts said.
The BOJ should raise 10-year yields to a range between 0 to 1 percent, says Sayuri Shirai at Keio University.
The authorities are likely to be comfortable with the current level of the Japanese yen, says Nomura's Takashi Miwa.
While black swans are inherently unpredictable, Nomura has pointed to 10 potential grey swans to worry about for 2017.
A stronger dollar ought to help spur inflation in Japan, says JPMorgan's James Sullivan.
Japan Inc. won't raise wages because there is a lack of confidence in the earnings outlook for the long-term, says Japan Center for Economic Research's Jun Saito.
Dollar strength could lead to a period of sustained yen weakness that could raise inflation in Japan, says Pinebridge Investments' Markus Schomer.