FX.co ★ Yen Finds Support as Dollar Weakens

The Japanese yen stabilized around ¥162 per dollar on Wednesday, supported by a weaker greenback after softer-than-expected US inflation data reduced concerns about imminent Federal Reserve interest rate hikes. However, the outlook remained uncertain amid escalating geopolitical tensions in the Middle East. Oil prices climbed after President Donald Trump threatened further strikes on Iran and reinstated a US blockade on Tehran in the Strait of Hormuz. In Japan, data showed that core machinery orders fell more than expected in May, underscoring broad-based weakness in business investment. Despite the modest rebound, the yen hovered near 40-year lows, with Tokyo yet to introduce concrete measures to shore up the currency. A recent report also indicated that Japan has no immediate plans to change the asset allocation of its state pension funds, tempering expectations for near-term support for domestic markets.