- USD/JPY flatlines near a six-week high of 160.56 following suspected foreign-exchange intervention by Japanese authorities.
- Finance Minister Satsuki Katayama stated the government is closely monitoring currency market movements to ensure economic stability.
- The US Dollar may regain ground as escalating Middle East conflicts drive increased global demand for safe-haven assets.
USD/JPY remains flat after two days of gains, trading around 160.50 during the Asian hours. The pair moves little after reaching a six-week high of 160.56 during earlier hours on Thursday, which could be attributed to possible foreign-exchange intervention by Japanese authorities.
Finance Minister Satsuki Katayama stated earlier this week that the government is keeping a close watch on currency market movements. She emphasized that Japan’s stance remains unchanged regarding its preparedness to implement decisive steps when needed to ensure market stability.
The Bank of Japan (BoJ) is widely anticipated to hike interest rates next week as policymakers battle soaring energy costs driven by the Middle East conflict. Tensions escalated sharply after Iran’s Islamic Revolutionary Guard Corps (IRGC) announced an immediate, total closure of the Strait of Hormuz, warning that any commercial or oil vessels attempting to transit the strait would be targeted.
The USD/JPY pair may further appreciate as the US Dollar (USD) may regain its ground amid rising safe-haven demand due to the ongoing Middle East conflict. Israeli military says that the Home Front Command, the branch of the Israel Defense Forces (IDF) responsible for civil defense, issues an early warning after launches from Lebanon toward northern Israel.
US Central Command (CENTCOM) confirmed that the US began airstrikes in Iran on Wednesday. Furthermore, President Donald Trump warned of severe military action if an interim peace deal is not finalized, accusing Tehran of stalling. Iranian officials, however, maintain they will not back down.
