Getting their campaigns under way at Stade de Bordeaux, both nations are competing to advance from Group D, which also includes Mali and Israel.
Match preview
Japan are gearing up for their 11th appearance at the Olympic Games, including their eighth in a row, and they will be aiming to improve on their efforts at Tokyo 2020 - finishing fourth after losing the bronze medal match to Mexico.
Go Oiwa was appointed head coach just a few months after Japan fell short of a podium finish in Tokyo and the 52-year-old is now tasked with leading his nation to their first football medal since they claimed bronze at Mexico City 1968.
The Samurai Blue have qualified for this year's tournament after winning the 2024 AFC Under-23 Asian Cup in May, winning six games out of seven including a slender 1-0 victory over Uzbekistan in the final.
Since that triumph, Japan have taken part in two friendly matches to prepare for the Paris Games, beginning with a 2-0 victory over USA on July 12 before playing out a respectable 1-1 draw with host nation France five days later.
Alexandre Lacazette's second-half strike cancelled out Joel Chima Fujita's first-half opener to force both teams to share the spoils. Nevertheless, Oiwa has taken plenty of positives from Japan's final warm-up match, stating that the contest against one of the pre-tournament favourites "gave us a valuable opportunity to condition our players and review our tactics."
The 2024 Paris Olympics will represent just the third time that Paraguay have taken part in the Men's Football Tournament and the first since they won a silver medal at Athens 2004.
La Albirroja coincidently beat Japan 4-3 in their opening group fixture of that tournament en route to reaching the final, where they suffered a narrow 1-0 defeat to fellow South Americans Argentina.
However, Paraguay got the better of Argentina and Tokyo 2020 gold medallists Brazil to finish first at the CONMEBOL Pre-Olympic Tournament earlier this year and qualify for the Paris Games - Argentina had to settle for second place while Brazil, who lost 1-0 to Paraguay, have surprisingly failed to qualify.
Veteran coach Carlos Jara Saguier led Paraguay to their aforementioned silver medal in 2004 and, having been re-appointed Under-23s boss in October last year, the 73-year-old will be seeking to emulate that achievement two decades on.
Paraguay, who have advanced to the knockout stage in both of their previous two appearances at the Olympics (including Barcelona 1992), enter the Paris Games after failing to win either of their warm-up matches this month, following up a 4-1 defeat to France with a 2-2 draw with Ukraine last week, scoring two goals in the final five minutes to salvage a share of the spoils against the latter.
Japan Under-23s friendly form:
Paraguay Under-23s friendly form:
Team News
Japan's national team director Masakuni Yamamoto has described the selection process for the Paris Games as "difficult" as star players including Real Sociedad's Takefusa Kubo and Liverpool Wataru Endo have not been permitted to take part by their respective clubs.
Oiwa has claimed that the "restrictions" in relation to European-based players - with the Olympics falling in a FIFA-designated window - has influenced their selection, with no overaged players named in his 18-man squad.
Shota Fujio began as a central striker in the friendly draw with Paraguay last time out, but he could move over to the right flank on Wednesday to allow Mao Hosoya to start up front - Japan have won seven Under-23s matches out of seven in which the 22-year-old has found the net.
As for Paraguay, their star player Julio Enciso of Brighton & Hove Albion played for the final 25 minutes against Ukraine to get valuable game time under his belt, and the 20-year-old could be joined in attack by Enso Gonzalez and Diego Gonzalez.
Kevin Parzajuk and Marcelo Fernandez both made the net ripple in the draw with Ukraine, but they may have to settle for a place on the substitutes' bench to begin with along with Marcelo Perez.
Thirty-six-year-old goalkeeper Gatito Fernandez and 32-year-old centre-back Fabian Balbuena are both expected to start, while Brighton-linked Diego Gomez - who currently plies his trade with Lionel Messi's Inter Miami - is set to operate in centre-midfield alongside Wilder Viera.
Japan Under-23s possible starting lineup:
Kokubo; Sekine, Takai, Kimura, Handa; Fujita, Yamamoto, Mito; Fujio, Hosoya, Hirakawa
Paraguay Under-23s possible starting lineup:
Fernandez; Flores, Balbuena, De Jesus; Nunez, Viera, Gomez, Rivas; D. Gonzalez, Enciso, E. Gonzalez
We say: Japan Under-23s 1-1 Paraguay Under-23s
Paraguay possess the potential to be a dark horse at the Paris Games, but they arguably face their toughest test in Group D on matchday one in the form of Japan, who will also fancy their chances of claiming victory from Wednesday's contest.
With little to separate these two nations, a closely-fought battle could be in store in Bordeaux, leading us to predict that the spoils will be shared on this occasion.