The Japanese yen held near 158 per dollar on Wednesday, supported by growing market optimism over a possible easing of tensions in the Middle East. Sentiment improved after US President Donald Trump said American forces would conclude operations in Iran “very soon,” outlining a timeframe of roughly two to three weeks. On the Iranian side, President Masoud Pezeshkian signaled readiness to end hostilities, conditional on receiving guarantees that the conflict will not resume.
On the domestic front, Japan’s latest economic data pointed to resilience despite geopolitical uncertainty. The Bank of Japan’s sentiment index for large manufacturers rose to 17 in the first quarter of 2026, its highest level since the fourth quarter of 2021, indicating solid business confidence. Separately, the Manufacturing PMI for March was revised up slightly to 51.6 from a preliminary 51.4, though it remained below February’s near four-year high of 53.
