The Japanese Yen (JPY) hovers near a multi-decade high at around 163.24 against the US Dollar (USD) during the early European trading session on Wednesday.
The USD/JPY pair reflects significant strength as the Japanese currency underperforms due to surging Oil prices
Oil prices have increased further as global energy supply risks have escalated due to the closure of the Bab el-Mandeb Strait by Yemen’s Iran-aligned Houthis. Higher oil prices bode poorly for currencies from economies, such as Japan, which rely heavily on energy imports. Sheer weakness in the Japanese Yen has increased hopes of Japan’s intervention in the FX market.
Earlier in the day, Japan’s Finance Minister (FM) Satsuki Katayama said that the authorities will take necessary steps on the foreign exchange if necessary. However, she declined to comment on specific forex levels. Going forward, investors will focus on Japan’s National Consumer Price Index (CPI) data for June, which will be released on Friday.