Dollar-yen holds firm in the upper ¥158 range as Middle East tensions fuel oil prices and concerns over US inflation

In Tokyo trading on the morning of the 13th, the yen fell against the dollar, trading in the mid-¥158 range per dollar. Tensions in the Middle East intensified after Yemen's Houthi movement attacked airports in Saudi Arabia, sending crude oil futures to two-week highs, with WTI in the ¥94 range and Brent in the ¥107 range. Concerns over a deterioration in Japan's trade balance also contributed, leaving yen selling and dollar buying dominant. The market expects the yen to hold firm in the upper ¥158 range, although some believe concerns over currency intervention will intensify if it approaches the ¥159 range.

As of 8:30, the yen was quoted at ¥158.52–54 per dollar and ¥176.89–91 per euro, with the yen weakening against both currencies. The euro fell against the dollar as concerns over France's fiscal management prompted euro selling.

Heightened tensions in the Middle East have driven oil prices higher. The November WTI front-month contract on the 12th settled at $94.36 per barrel, while Brent stood at $107.17, both near two-week highs. Reports of attacks on oil tankers over the weekend have also heightened concerns over supply. Rising energy prices are expected to strengthen pressure to sell the yen through their impact on the expansion of Japan's trade deficit.

Attention is focused on US inflation data and the Federal Reserve's policy operations, with the September CPI due on the 14th regarded as important data. The DXY was near 102.58, holding at its highest level since April 2025, while the market increasingly priced in the prospect of rate hikes. Weakness in European currencies is pushing up the dollar, with the euro near a 17-month low and sterling slightly lower against the dollar. Tokyo stocks are expected to open soft against the backdrop of Middle East risks, while earnings releases from major US companies are also drawing market attention.