* BOJ Considers Raising Cap on 10-Year Yield – Nikkei * Focus on Central Bank Talks – BOJ, BOE, Fed * US Cash Back, Alien Payouts Also This Week (Adds US Treasury Borrowing Estimates, Updates Prices) Gertrude Chavez- Dreyfuss NEW YORK , Oct 30 (Reuters) – The Japanese yen climbed to a two-week high against the dollar on Monday after a report said the Bank of Japan was considering adjusting its yield curve management policy to allow for a 10-year Japanese government bond. in Tuesday’s session, the yield will rise above 1%. The report pushed the Nikkei to just 148.81 per dollar, its strongest level since Oct. 17. The dollar, which has been on the defensive all day, was last down 0.4% at ¥149.065. Rising global rates increased pressure on the BOJ, which opened its two-day monetary policy meeting on Monday to change its policy of controlling bond yields, in which it maintains a short-term interest rate target of -0.1% and a 0% ceiling. on the 10-year bond yield. “If the BOJ does nothing tomorrow, which I think is what economists expect, and you wait until December, I think the dollar will jump right back against the yen,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. . But with Monday’s action, Chandler thinks Japanese intervention seems unlikely, though he noted that in the past few weeks the BOJ has intervened in the bond market as an alternative. “The key to intervention is excessive volatility and what the BOJ is saying is this: that it is not targeting a specific level. So that takes the magic out of the 150 mark,” he said. In addition to the BOJ, market participants await interest rate decisions from the US central bank and the Bank of England (BoE). Also due out this week are a number of purchasing managers’ surveys, euro zone inflation and GDP data and US payrolls. “Had the domestic consumer data not been so strong last week, we’d probably be looking at a bigger drop in the dollar, but it’s still quite difficult for markets to discount the resilience of the US economy,” Helen Given said. FX Trader at Monex USA in Washington. Analysts also pointed to the U.S. Treasury’s quarterly refund announcement on Wednesday that could move both bond and currency markets. This comes as rising deficits and higher interest burdens have substantially increased the US Treasury’s funding needs. Since the last announcement in August, interest rates on borrowing have climbed to their highest levels since 2006-07. The dollar index was last down 0.4% at 106.11 after earlier hitting a weekly low of 106.06, hurt by a stronger euro. The euro was last up 0.5% at $1.0615. The U.S. Treasury Department on Monday reported borrowing estimates of $776 billion for the fourth quarter, down from a forecast of $852 billion announced on July 31, due to higher revenue expectations. The dollar slightly extended losses after the announcement. Both the Fed and the BoE are expected to hold rates steady later this week, so barring any surprises, we’ll focus on the message from policymakers. The pound gained 0.4% to $1.2164. Friday’s US non-farm payrolls data will also be important for Fed rate hike expectations. Wall Street economists expect 188,000 new jobs in October, according to a Reuters poll. ================================================== == ====== Currency Bid Prices at 15:31 (1931 GMT) Description RIC Last Close US Change Pct YTD Pct High Bid Low Bid Previous Session Change Dollar Index 106.1300 106.6000 -0.43% 2.551 % +106.71060600000 EUR +106 USD $1.0565 + 0.47% -0.93% + $1.0625 + $1.0547 149.0600 USD/JPY 149.0600 149.6500 -0.39% +13.70% +149.8450 +148.8100 EUR/22% 150.7% + 150.7% + 22% 150.0.7% 58.9200 +157.7000 USD/Swiss 0.9016 0. 9021 -0.04% – 2.48% +0.9048 +0.9010 GBP/USD $1.2163 $1.2123 +0.35% +0.59% +$1.2171 +$1.2090 USD/Canadian 1.3821 1.3872 +24.38% +2.381% +2.38% +2.38% D lar $0.6374 $0.6334 +0.68% -6.45% +$0 .6384 + $0.6333 Euro/Switzerland 0.9568 0.9535 +0.35% -3.30% +0.9583 +0.9526 Euro/Sterling 0.8725 0.8713 +0.14% -1 .35% +0.8740 +0.8740 N585% – $0.807 N592 +$0.807 0.98% + $0.5845 + $0.5805/USD/USD/Norway 11.1400 11.1820 -0.24 % +13.66% +11.1880 +11.1070 Euro/Norway 11.8289 11.8024 +0.23% +12.67% +11.8504 +11.71804 +11.71804 +11.71804 149.014 dollar % +7.04% +11.1798 +11.1179 Euro/Sweden 11.8206 11.7487 +0.61% +6.02% +11.8377 +11.7729 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting from Alun John in London and Rae Wee in Singapore; Editing by Miral Fahmy, Mark Potter, Andrea Ricci, Alexander Smith and Jonathan Oatis)