Yen Recovers After Three Sessions of Decline, Here's How It's Going!
The Japanese yen strengthened to around 157.7 per dollar on Wednesday (May 6), breaking a three-day losing streak. This movement occurred as the US dollar and oil prices both fell, as markets saw signs of easing tensions in the Middle East.
Sentiment improved after Washington reaffirmed a ceasefire and declared that offensive operations against Iran had ended. The US also temporarily suspended efforts to assist stranded ships in the Strait of Hormuz, allowing for further talks with Tehran. The reduced risk of escalation in this key energy route has contributed to pressure on oil prices, which in turn has eased pressure on energy import costs.
The yen tends to be sensitive to Middle East dynamics because Japan relies heavily on oil imports from the Gulf region. When oil prices weaken and geopolitical uncertainty eases, the yen often finds relative support as a safe haven currency, while pressure on the energy trade balance also appears to be lessened.
On the policy front, market participants remain wary of potential support from Japanese authorities following allegations of intervention last week. Estimates suggest Tokyo may inject around US$35 billion to stabilize the yen, although there has been no official confirmation. However, the yen's recent pullback is also being interpreted by the market as a signal of a lack of consistent follow-up action from policymakers. (asd)
Source: Newsmaker.id
