- USD/JPY trades on a flat note near 157.25 in Tuesday’s early Asian session.
- Rising tensions in the Middle East could boost the US Dollar.
- Markets remain on high alert following suspected interventions by Japanese authorities.
The USD/JPY pair holds steady around 157.25 during the Asian trading hours on Tuesday. The latest developments in the Middle East send oil prices higher, sparking further fears of instability in the region. The US April ISM Services Purchasing Managers Index (PMI) report will be published due later on Tuesday.
The United Arab Emirates said on Monday that it had intercepted a number of missiles fired from Iran. That’s the first time the UAE’s missile alert system was activated since the US-Iran ceasefire began last month. US President Donald Trump on Monday warned Iran that it will be “blown off the face of the earth” if it targets US ships that are protecting commercial vessels transiting the strait.
Meanwhile, Iran’s Foreign Minister Abbas Araghchi stated the current situation in the Strait of Hormuz makes it “clear that there’s no military solution to a political crisis.” Any signs of rising tensions in the Middle East could support the US Dollar (USD) against the Japanese Yen (JPY).
Traders remain on edge over the potential for Japanese authorities to step back into the market after last week’s intervention to curb weakness. Japanese Finance Minister Satsuki Katayama said Japan can take action against speculative foreign-exchange movements.
