08.07.202602:42:43UTC+00Yen Weakens on Renewed US-Iran Tensions

The Japanese yen weakened toward 162.5 per dollar on Wednesday, slipping back toward 40-year lows as the US dollar strengthened on renewed safe-haven demand following fresh US air strikes on Iran, carried out in response to recent attacks on ships transiting the Strait of Hormuz. The escalation pushed oil prices higher, reigniting inflation concerns and adding pressure on Japan’s economy and currency given the country’s heavy dependence on Middle Eastern crude imports. At the same time, traders continued to short the yen in the absence of any concrete intervention by Japanese authorities. Still, markets stayed alert for potential action from Tokyo to shore up the currency, though many investors questioned whether intervention on its own could deliver durable support. Finance Minister Satsuki Katayama recently reiterated that officials stand ready to step into the foreign exchange market when needed, noting that Japan and the US remain in close contact on currency policy.