The Japanese yen faces a critical risk moment as Kazuo Ueda's speech may set the tone for the market's direction.

(1) This Friday, Bank of Japan Governor Kazuo Ueda will deliver remarks following the policy meeting, marking a critical risk event for the yen. The market generally expects the Bank of Japan to keep interest rates unchanged, but traders will closely monitor Ueda's statements to guard against any missteps that could trigger a further decline in the yen. (2) In June, the yen fell to its weakest level against the US dollar since 1986, and it has continued to weaken this month, facing ongoing pressure from rising oil prices, fiscal policy concerns, and a wide interest rate gap. Although clearer signals from Ueda could help stabilize the yen, market participants believe this is unlikely to prompt a significant rebound in the currency. (3) Mark Dowding, Chief Investment Officer at RBC Bluebay, stated that if Ueda's stance is not sufficiently hawkish, the US dollar/yen pair could break below 165. He believes Ueda may open the door to a rate hike at the September or October meeting, but his hawkishness will not be enough to drive a substantial strengthening of the yen.