Dollar-Yen Awaits BOJ Governor Ueda's Speech Near 158 Yen

The dollar-yen pair in Tokyo is closely watched as it hovers around the 158-yen level ahead of Bank of Japan Governor Kazuo Ueda's speech scheduled for the afternoon. The pair briefly reached 158.30 yen in the previous session but retreated as U.S. long-term yields paused, closing near 157.50 yen. Investors are keenly awaiting Ueda's remarks to gauge any hints about further monetary policy adjustments.

Speculation around yen buybacks by Japanese domestic funds has eased following reports that the Government Pension Investment Fund (GPIF) did not review its basic portfolio in September. Meanwhile, the U.S. 10-year Treasury yield climbed to 5.3472%, its highest in 24 years, strengthening the dollar against the yen. Euro weakness and dollar strength also supported the pair, with the Dollar Index (DXY) briefly rising to 102.53. However, lower oil prices due to increased Middle East exports provided some resistance to further yen declines.

Prime Minister Sanae Takaichi emphasized responsible fiscal policy to boost Japan's growth and curb yen weakness. She assured that funding for consumption tax cuts would not rely on special deficit-financing bonds, aiming to maintain market confidence. Her remarks were seen as a factor limiting yen depreciation.

Governor Ueda's speech is the main focus, with markets almost fully pricing in an additional rate hike in December. Inflation data shows persistent pressure, but Ueda has expressed caution about consecutive rate hikes. Analysts expect Ueda to avoid deep policy discussions, though any hints at an early rate hike could strengthen the yen. U.S. economic indicators and Fed officials' comments also remain in focus.