The yen was firm in the ¥158 range in New York. Dollar buying advanced against a backdrop of heightened Middle East tensions and rising US yields.
USD/JPY traded firmly in the New York market on the 1st, closing at ¥158.09. A WSJ report about speculation that President Trump could resume military action against Iran pushed up crude oil futures and US long-term yields, supporting dollar buying. Trading was choppy around ¥158 early in the session, but yen buying and dollar selling temporarily intensified after New York participants entered the market in force. After falling to ¥157.24, the pair recovered to around ¥158.26.
The euro fell following developments during European trading hours. EUR/USD closed at $1.1244, down approximately $0.0086 from the previous day. Higher US long-term yields supported the dollar, while ECB President Lagarde’s stance discouraging expectations of aggressive rate hikes weighed on the euro. EUR/JPY at times fell to its lowest level in approximately 11 months, with the euro trading around ¥177.
Upward pressure on the yen persisted in Tokyo, limiting yen selling and dollar buying. In morning trading on the 2nd, USD/JPY was ¥158.11–13, a 26-sen rise in the yen against the dollar, while periods of rising US crude oil futures capped the yen’s upside. This was related to crude oil rising again following the WSJ report.
Middle East risks and US interest-rate trends drove the market. WSJ reports sent crude oil prices sharply higher, while dollar buying strengthened as US long-term yields remained elevated. At the same time, concerns about currency intervention remained strong, and the upper ¥158 range through the ¥159 range was seen as difficult to break. The Trump administration’s Middle East policy and crude oil price trends are expected to be the focus going forward.