The Japanese yen weakened toward 160 per dollar on Tuesday, approaching levels last seen in July 2024, when Tokyo last intervened in the foreign exchange market. The currency remained under pressure from a strong US dollar and elevated oil prices, driven in part by the ongoing conflict in the Middle East. Tensions intensified after President Donald Trump set a Tuesday deadline for Iran to reach an agreement or face potential strikes on civilian infrastructure.
Tehran rejected a US-backed ceasefire proposal, instead demanding a halt to regional hostilities, the lifting of sanctions, and other concessions. In parallel, Prime Minister Sanae Takaichi said she plans to hold talks with Iran’s leader and to conduct a separate call with Trump as part of broader efforts to promote peace.
On the monetary policy front, markets are increasingly pricing in the possibility of a Bank of Japan interest rate hike this month, reflecting mounting inflationary pressures.
