In battle mode, when placing characters make the character selection screen show up immediately after pressing Z for placing the current character to a slot. Now you always have to press X in order to return to the upper menu.
So once you place a character, auto-return to the "character wheel" instead of keeping the already placed character selected.
After all the characters are placed, auto-return to the menu where you can start the battle. There is "place characters" option, so you can return to the character placing mode if you wish to do any changes.