Dollar Surges as Japan Hints at Policy Tightening

The dollar rose against the yen after Japan's central bank suggested future monetary tightening. The euro steadied post-its recent low, while markets await key economic data and potential tariff impacts under Trump's administration. The potential for U.S. tariffs impacts euro speculation towards parity.

The dollar strengthened against the yen on Monday as signals emerged from Japan's central bank regarding possible monetary policy tightening, though specifics on timing remain unclear. Meanwhile, the euro showed stability after a recent drop to a one-year low.

This movement follows remarks by Bank of Japan Governor Kazuo Ueda, who indicated gradual interest rate increases, dependent on economic forecasts, without specifying when such hikes might occur. The dollar gained 0.51%, moving to 154.95 yen from Friday's low of 153.86 yen, especially after comments from Japanese Finance Minister Katsunobu Kato indicated possible intervention.

Market analysts speculate on future rate changes, particularly after Donald Trump's U.S. presidential election victory stirred potential for protectionist tariffs impacting the euro. The market eyes Trump's forthcoming pick for Treasury Secretary and anticipates possible euro-dollar parity under new economic policies, while closely monitoring global economic indicators and central bank discussions.

(With inputs from agencies.)