The yen extended its decline in the New York foreign exchange market on the 21st, ending in the first half of the ¥157 range. Tensions in the Middle East and caution over the outcome of the Japan-U.S. summit prompted yen selling.
In the New York market on the 21st, the yen weakened by approximately ¥0.45 against the dollar from the previous Friday, with the dollar ending trading at around ¥157.30–40 and the yen moving within a ¥157.17–¥157.53 range. Expectations of a Federal Reserve rate hike provided support for dollar buying, but hopes for easing tensions in the Middle East and movements in crude oil prices curbed the momentum of dollar buying, leaving yen selling dominant. Attention then shifted to the outcome of the Japan-U.S. summit and diplomatic developments. The market appeared to be seeing broad-based selling aimed at adjusting positions.
Market participants said expectations for a diplomatic resolution between Iran and the United States grew on reports that President Masoud Pezeshkian would attend the United Nations General Assembly in New York this week and that Fox News reported President Donald Trump was open to dialogue with Masoud Pezeshkian. Against this backdrop, crude oil prices fell and U.S. long-term interest rates declined. Reports that Trump could be open to meeting with Iran on the occasion of the United Nations General Assembly were also cited as a market factor.
As caution over the Japan-U.S. summit and market intervention intensified, reports in the Japanese market said a meeting between Prime Minister Takaichi Sanae (高市早苗) and President Trump was scheduled for the 22nd, with investment in the United States and tariff issues expected to be on the agenda. There were also reports that the Bank of Japan had conducted a rate check, prompting the view that intervention concerns aimed at curbing downward pressure on the yen supported the currency's firm downside.