A preliminary US-Iran agreement and softer US inflation data push the Dollar lower, boosting the Yen near 159.26.
The Japanese Yen strengthened against the US Dollar, with USD/JPY dropping to around 159.26 after a five-day rally. The Greenback retreated following reports of a preliminary 60-day truce between the US and Iran, easing geopolitical tensions and reducing safe-haven demand for the Dollar.
The US Dollar Index (DXY) fell from a seven-week high near 99.54 to around 99.00. Softer US inflation data also weighed on the Dollar, as April’s core PCE Price Index rose 0.2% month-over-month, below expectations and down from March’s 0.3% gain. The agreement, which awaits final approval, includes provisions to keep the Strait of Hormuz open and remove Iranian mines within 30 days.
Oil prices eased on the news, further supporting the Yen, which is sensitive to energy price fluctuations due to Japan’s reliance on Middle East imports.