The yen weakens further against the USD amid rising geopolitical risks and widening US-Japan rate differentials.
The USD/JPY pair climbed to a fresh daily high near 159.30, gaining over 0.25% as the US dollar rebounded from a three-month low. The move follows an intraday dip to the mid-158.00s during early European trading on Monday.
Support for the dollar stems from escalating US-Iran tensions, with new sanctions expected to be announced later today. Iran has threatened to halt oil exports through the Strait of Hormuz if economic pressure persists, keeping a war-risk premium in play. Markets also anticipate potential Fed rate hikes in 2026 amid inflation concerns tied to volatile oil prices.
Traders will focus on upcoming US PCE data and Fed Chair remarks at the Jackson Hole Symposium this week for further policy cues.