The USD/JPY pair experiences a modest ascent, approaching 157.15 during the early hours of the European session on Monday. Trump dismissed the latest Iran peace proposal, labeling it as “totally unacceptable.” Japan’s Mimura indicated that ongoing intervention remains a possibility. The USD/JPY pair appreciates to approximately 157.15 in the early European session on Monday. The US Dollar edges higher against the Euro as ongoing concerns over the Middle East conflict boost safe-haven flows.
Recent escalations in the Middle East have occurred following US President Donald Trump’s dismissal of Iran’s most recent peace proposal, a decision that has contributed to an increase in oil prices and exerted pressure on the Cable. As reported that Tehran’s proposal encompassed an immediate cessation of hostilities across all fronts, a termination of the US naval blockade, and assurances against any future assaults on Iran.
Nonetheless, ongoing threats of intervention from Japanese authorities could limit the potential gains for the pair. Japanese officials are said to have intervened in the currency market once more during the Golden Week. Market participants have assessed the financial implications of these supplementary actions to be in the range of ¥4 trillion to ¥5 trillion ($32 billion). Japan’s leading foreign exchange authority,
Atsushi Mimura, indicated last week that ongoing intervention remains a possibility, noting that the regulations set forth by the International Monetary Fund do not impose restrictions on the frequency of such interventions. “Intervention risk and strong official warnings rendered it unappealing to pursue weakness near 160,” stated Stefan Rittner. Nevertheless, “persistent structural headwinds limit the case for a sustained yen rebound despite the cheap valuation and further intervention risk should rise again if dollar-yen approaches prior levels,” Rittner added.