FX.co ★ Yen Weakness Stokes Intervention Fears

The Japanese yen traded around 159.2 per dollar on Friday, hovering near its weakest level since July 2024 and stoking concerns about potential government intervention. Bank of Japan Governor Kazuo Ueda cautioned that yen depreciation could amplify imported inflation amid rising oil prices, which may compel the central bank to speed up the pace of policy normalization. He also noted that exchange rate movements now exert a greater influence on inflation than in the past, giving them increased prominence in monetary policy deliberations. Oil prices climbed sharply after Iran’s new supreme leader, Mojtaba Khamenei, vowed to keep the Strait of Hormuz effectively closed while Tehran stepped up attacks on regional oil and transport infrastructure. The conflict in the Middle East showed no sign of easing, with hard-line statements from both Tehran and Washington indicating that the war involving Iran remains far from de-escalation even after nearly two weeks of hostilities.