| 06 Apr 2026 12:59 | | Yen slides near 160 as Iran tensions intensify | | | The Japanese yen weakened toward 159.7 per dollar, lingering near its weakest levels since July 2024 as escalating tensions involving Iran weighed heavily on sentiment. Investor concerns intensified after Donald Trump threatened further action if the Strait of Hormuz remains closed, raising fears of prolonged disruptions in global oil supply. Traditionally seen as a safe-haven asset, the yen has instead come under sustained selling pressure, largely due to Japan’s heavy reliance on imported energy. Elevated oil prices are worsening the country’s trade balance, undermining currency stability at a time of heightened global uncertainty. At the same time, domestic data offered little relief, with inflation easing to 1.3% and remaining below the Bank of Japan’s 2% target, alongside soft retail activity signaling weak demand. This has reinforced expectations that the central bank will maintain its accommodative stance. In contrast, the Federal Reserve continues to hold a relatively hawkish position, widening the policy gap and supporting the dollar. The dollar index, now back above 100, has added further downside pressure on the yen, keeping it on the defensive with markets now closely watching the upcoming FOMC Minutes for clearer signals on the Fed’s policy path.
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