Dollar Soars: Ueda Stirs Markets with Policy Hints

The dollar rose against the yen following comments by Bank of Japan Governor Kazuo Ueda, who hinted at future policy tightening. Amid uncertainty over when a rate hike might occur, markets priced in a 54% chance of a hike at the next meeting. U.S. economic policies under Trump also influenced the markets.

The dollar gained ground against the yen on Monday after Bank of Japan Governor Kazuo Ueda's remarks suggested potential policy tightening, albeit leaving the timing uncertain. His comments have heightened anticipation ahead of the next Bank of Japan policy meeting on December 19.

Despite refraining from confirming a rate hike in December, Ueda noted the bank was wary of various risks, including those affecting the U.S. economy. This was his first direct address on monetary policy since Donald Trump won the U.S. presidency, leading to market speculation about an impending hike.

The ambiguity contributed to a 0.35% rise in the dollar, moving it away from last week's low. This slight increase complements recent gains in the U.S. dollar index, driven in part by shifts in U.S. Treasury yields and Trump's policy proposals.

(With inputs from agencies.)