The Japanese yen weakened beyond 159.5 per dollar on Monday, marking a third consecutive session of losses, as oil prices climbed again following the failure of US–Iran peace talks in Islamabad over the weekend. President Donald Trump also announced plans to blockade the Strait of Hormuz and is reportedly considering resuming strikes on Iran, heightening the risk of a deeper global energy crisis.
The prolonged conflict is further constraining the Bank of Japan’s room to raise interest rates in the near term, leaving policymakers split between those prioritizing rising inflation risks and those worried about downside risks to growth. The central bank is scheduled to hold its next policy meeting on April 27–28.
Meanwhile, Economy Minister Ryosei Akazawa suggested that BOJ monetary policy could be deployed as a tool to rein in inflation by supporting a stronger yen. The currency is currently trading near the closely watched 160-per-dollar level, which previously prompted official intervention in July 2024.
