SYDNEY- The dollar rose against the yen on Monday after Japan’s top central banker flagged further policy tightening ahead but left open the question of timing, leaving the market no clearer on whether a move would come next month.
Bank of Japan Governor Kazuo Ueda reiterated that interest rates would continue to rise gradually should the economy develop in line with the central bank’s outlook.
However, he made no mention of whether a hike would come in December, saying the BOJ would need to pay attention to various risks, including for the US economy.
Later in a media conference, Ueda added that they would not wait for clarity on all the risks before acting on rates, and delaying might end up requiring more aggressive hikes.
That left the market pricing in a 54 percent chance of a quarter-point hike at the next policy meeting on Dec. 19, little changed from before the speech.
This was his first opportunity to speak directly on monetary policy since Donald Trump’s victory in the US presidential election on Nov. 5, leading investors to wonder if he would be more specific on the prospects for a hike.
The lack of clear guidance saw the dollar edge up 0.35 percent to 154.72 yen and away from Friday’s low of 153.86. It pulled back late last week after Japanese Finance Minister Katsunobu Kato on Friday put the market on warning of possible intervention if the yen fell too far and too fast.
That retreat had helped steady the euro for the moment at $1.0540 though that was still uncomfortably close to the recent one-year trough of $1.0496.
Against a basket of currencies, the dollar held at 106.660, having touched a one-year top of 107.07 on Friday. The index climbed 1.6 percent over the week, marking six weeks of gains in the last seven.