Yen Strengthens on Oil and Dollar Weakness
The Japanese yen strengthened above 159 per dollar on Monday, rebounding from its weakest level in three weeks. This strengthening occurred as oil prices fell and the US dollar weakened, amid signs the US and Iran were moving closer to a deal that could potentially reopen the Strait of Hormuz. If the energy shipping route truly returns to normal, the impact would be considered positive for many Asian economies that rely heavily on oil imports from the Middle East.
Domestically, data last week showed Japan's core inflation slowed to a four-year low in April, easing pressure on the Bank of Japan (BOJ) to tighten monetary policy soon. However, the BOJ still has the potential to consider raising interest rates if the Japanese economy remains resilient.
On the other hand, the market also remains cautious due to the risk of currency intervention. The yen is still hovering near the 160 per dollar area, the level previously cited as triggering Tokyo's intervention in late April to early May, so any rapid yen weakening could potentially reignite policy speculation. (asd)
Source: Newsmaker.id
