Nov 21 (Reuters) - JPY-related FX and options markets remain focused on any clues regarding the Bank of Japan's policy trajectory. Recent speculation and market moves underline the high sensitivity to potential signals, but when might the BoJ provide clearer hints?

Market reaction to Ueda's speech on Monday

USD/JPY spot fell initially, while FX option implied volatility and downside strike premiums rose ahead of Bank of Japan Governor Kazuo Ueda's speech on Monday, driven by preemptive short-covering. However, JPY bulls were left disappointed as Ueda offered little to sustain hawkish bets, prompting a swift reversion in both spot and option markets.

Upcoming risk events drive volatility

Benchmark 1-month USD/JPY options, now encompassing the Dec. 18 Federal Reserve and Dec. 19 BoJ policy decisions, have seen a marked rise in implied volatility and premiums. This surge reflects the heightened risk of significant market activity tied to these pivotal meetings, more so the BoJ one, underscoring their importance for JPY traders.

Focus shifts to key data and speeches

Ueda spoke again at a financial forum on Thursday and his mention of the exchange rate did prompt some JPY strength, although he reiterated the BoJ's dependence on seeing more data before making any decisions at the December policy meeting.

Attention now turns to Japan's consumer inflation data on Friday, which could reveal whether rising labour costs are filtering into higher services prices - a potential signal of broader inflationary pressures.

Other notable dates ahead of BoJ's decision

Following Friday's inflation data, the next key event is dovish BoJ board member Toyoaki Nakamura's Dec. 5 speech and press conference. This precedes the release of the Tankan quarterly business survey on Dec. 13, which could be a decisive factor. Strength in corporate sentiment, capital expenditure plans, and inflation expectations could bolster the case for a December rate hike, raising the stakes for the BoJ's upcoming meeting.

Markets will closely monitor these developments, whilst also remaining alert to bouts of risk aversion from geopolitical events and the impending Trump presidency, with heightened volatility expected as traders navigate this critical period.

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(Richard Pace is a Reuters market analyst. The views expressed are his own; Editing by Alison Williams)

((Richard.Pace@thomsonreuters.com))