The yen stabilizes near a six-week low as markets weigh potential Japanese forex intervention and rising Middle East tensions.
USD/JPY trades flat at 160.50 in Asian hours after hitting a six-week high of 160.56 earlier Thursday. The pair’s muted reaction follows speculation of Japanese authorities intervening to curb yen weakness, though no official action has been confirmed.
Finance Minister Satsuki Katayama reiterated Japan’s readiness to take decisive steps if needed, while the Bank of Japan is expected to raise interest rates next week to combat inflation driven by surging energy costs. Geopolitical risks, including Iran’s closure of the Strait of Hormuz and escalating Middle East conflict, may support further USD strength.
Markets remain cautious as U.S. airstrikes in Iran and warnings from President Donald Trump add to safe-haven demand. The yen’s stability contrasts with broader volatility tied to regional tensions and monetary policy expectations.