FX.co ★ Yen Extends Fall on Surging Oil Prices

The Japanese yen weakened to around 159 per dollar on Thursday, nearing its lowest level in a year and a half as rising oil prices intensified pressure on the country’s oil-dependent economy. Crude prices climbed for a second consecutive session, with concerns over a prolonged Iran war outweighing the impact of a coordinated release of strategic reserves by major economies. The IEA approved its largest-ever drawdown of 400 million barrels, including 172 million barrels from the US and 80 million barrels from Japan’s reserves. Japan remains particularly vulnerable to oil supply disruptions due to its heavy reliance on Middle Eastern imports. At the same time, traders remained vigilant for potential intervention by Japanese authorities as the yen approached levels last seen in July 2024, when Tokyo previously stepped in to shore up the currency.