Yen buying strengthened in the London market, sending dollar-yen down temporarily to the 156.80 level. The dollar was also capped at times by lower oil prices and optimism over the situation in the Middle East, but price movements later pushed the yen higher again as oil prices plunged.
Yen buying prevailed in the London market, and dollar-yen fell temporarily to the upper 156 range. Oil later rebounded from its decline, prompting buying from the low 157 range into the upper 157 range and reviving market activity.
As indicated in the headline, lower long-term US Treasury yields and movements in oil prices drove dollar-yen trading. Oil also turned sharply lower at times, prompting yen buying to strengthen again.
Cross-yen pairs, including euro-yen and pound-yen, also moved in the direction of a stronger yen, while euro-dollar and pound-dollar continued to lack a clear direction. Going forward, developments in the Middle East and movements in the oil market will be watched as factors that could sustain dollar weakness and yen strength.
Following movements in the London market, dollar-yen at times recovered from the mid-156 range to the upper 157 range. Overall, trading was choppy, influenced by lower oil prices and geopolitical risks.