USD/JPY surges 0.5% as BOJ's Ueda signals December rate hike possibility

USD/JPY jumped 0.5% to 150.25 after Bank of Japan Governor Kazuo Ueda provided the clearest signal yet of a potential December rate hike. Ueda's hawkish comments surprised markets, suggesting the BOJ is seriously considering ending its ultra-loose monetary policy stance sooner than expected. The yen initially strengthened but quickly reversed as traders reassessed the implications for carry trades and yield differentials. Market pricing now shows a 65% probability of a 25 basis point hike at the December 19 meeting, up from 40% previously. Technical analysis shows USD/JPY breaking above the 150.00 psychological resistance, with next targets at 150.80 and 151.50. Support has formed at 149.50, coinciding with the 20-day moving average. The development marks a significant shift in BOJ communication and could trigger broader yen strength if confirmed by subsequent policy actions.