Ella 
USD/JPY is trading higher at around 149.90 in Asia on Monday. USD/JPY found upside support following comments from Bank of Japan Governor Kazuo Ueda on Friday.
Bank of Japan Governor Kazuo Ueda reiterated that the central bank remains steadfast in its commitment to achieving its 2% inflation target in a stable and sustainable manner. Kazuo Ueda stressed that the current loose policy will be patiently maintained.
In terms of political developments in Japan, two by-elections were held on Sunday, involving one lower house seat and one upper house seat. The ruling Liberal Democratic Party (LDP) won the lower house (lower house) election but faced defeat in the lower house election, which was won by an independent candidate backed by the opposition.
However, approval ratings for Japanese Prime Minister Kishida’s cabinet have fallen to their lowest levels since he took office in October 2021. There is speculation that if the Liberal Democratic Party wins two seats, Kishida may dissolve the lower house and hold a general election at the end of the year.
In addition, traders are concerned that Japan may intervene to counter the long-term depreciation of the yen, which may limit USD/JPY gains.
The U.S. dollar index interrupted its recent decline, possibly supported by strong U.S. economic data. At press time, USD/JPY was trading higher near 106.30.
In addition, stronger U.S. bond yields also boosted the dollar. As of press time, the 10-year U.S. bond yield was 4.98%, up 1.30%.
Federal Reserve (Fed) Chairman Jerome Powell said last week that the Fed has no plans to raise interest rates. Powell also stressed that further tightening of monetary policy is possible if further signs of economic growth emerge.
Atlanta Fed President Raphael Bostic said on Friday that the Fed is unlikely to cut interest rates before the middle of next year. Philadelphia Fed President Patrick Harker reiterated his preference to keep interest rates unchanged.
In addition, Cleveland Fed President Loretta Mester said the Fed is “at or near the peak of its rate hike cycle.” However, Mester also admitted that the data released last week may affect the central bank’s decision on future monetary policy.
Investors will pay close attention to the U.S. S&P Global Purchasing Managers Index, due on Tuesday, and third-quarter gross domestic product on Thursday. The focus on Friday will be Japan’s consumer price index.
