Investors pare yen gains as Iranian officials temper optimism over a US-Iran agreement, keeping intervention risks elevated.
The Japanese yen erased earlier gains against the US dollar on Friday, with USD/JPY climbing back above 160.00. The pair’s rebound follows mixed signals from Iranian authorities after President Trump suggested a deal to reopen the Strait of Hormuz could be reached this weekend.
Markets had initially reacted positively to Trump’s announcement, but Iran’s Foreign Ministry later described the proposed agreement as merely “closer to being approved.” The cautious tone from Tehran has left investors wary, reducing demand for safe-haven assets like the yen.
USD/JPY now hovers near levels that previously triggered Japanese intervention. Finance Minister Satsuki Katayama reiterated this week that Tokyo remains prepared to act against excessive yen weakness, though recent warnings have failed to stabilize the currency. Bank of Japan Governor Kazuo Ueda’s hospitalization adds further uncertainty ahead of next week’s policy meeting.