In Friday’s early Asian session, USD/JPY remains stable at 159.60. The US dollar is supported by ongoing tensions in the Middle East, but its rise may be limited by US tariff threats. BoJ officials cautioned that if Yen weakness continues, they might change policy. During Friday’s Asian trading hours, the USD/JPY pair is trading flat at 159.60. The Good Friday holiday is likely to result in low trading volumes. When the US March Nonfarm Payrolls report is released later on Friday, all eyes will be on it.
Increased oil prices and a stronger US dollar relative to the Japanese yen are caused by heightened geopolitical tensions in the Middle East. After a missile strike destroys a bridge close to Tehran, US President Donald Trump puts pressure on Iran to reach an agreement. Iran’s foreign minister, Abbas Araghchi, added that Washington’s latest attacks on civilian infrastructure “convey the defeat and moral collapse of an enemy in disarray” and that the country will not back down.
However, the turmoil surrounding US tariff policies may limit the strength of the US dollar. The Trump administration plans to slap up to 100% on certain imported medicines from companies that don’t reach deals with his administration in the coming months. A White House statement said that the new levy applies to patented drugs made in countries that lack tariff deals with the US by companies that don’t have most-favored-nation-pricing agreements with the administration.
A headwind for the pair could be the JPY’s support due to worries that Japanese authorities would intervene to strengthen the home currency. Japan’s top currency diplomat, Atsushi Mimura, said on Monday that officials may need to take “decisive” steps if speculative moves persist in the currency market.