Japanese Yen slides as Mideast uncertainty counters weak USD
Finance Japanese Yen slides as Mideast uncertainty counters weak USD The USD/JPY pair attracts some dip-buyers following a bearish gap opening on Monday and reclaims the 159.00 mark during the early part of the European session. Moreover, spot prices remain well within striking distance of a three-week high, touched last Thursday, and seem poised to appreciate further amid mixed signals over a potential US-Iran peace deal. Developments over the weekend fuel hopes for a potential deal to end a nearly three-month-long Iran war and boost investors‘ confidence, undermining the US Dollar’s (USD) reserve currency status. However, the US and Iran remained at odds over key issues, including blockades on the Strait of Hormuz and Tehrans nuclear program. US President Donald Trump said on Sunday that he had told his representatives not to rush into any deal with Iran. This keeps geopolitical risks in play and caps the market enthusiasm. Furthermore, traders have nearly fully priced in at least one 25 basis points (bps) interest rate hike by the US Federal Reserve (Fed) in early 2027, which helps limit deeper USD losses. Meanwhile, investors remain worried about economic risks stemming from the continued disruption of energy supplies. This, in turn, undermines the Japanese Yen (JPY)