USD/JPY Strengthens, BOJ in Focus
USD/JPY continued its strengthening for the fifth consecutive day, trading around 159.80 during Friday's Asian session, approaching its highest level in nearly two weeks. This movement puts USD/JPY on track for a solid weekly gain, although short-term direction remains confined within the range it has established for more than a month.
The pair's strengthening was driven by a combination of a solid US dollar and the continued weakening of the Japanese yen. The Japanese currency remains under pressure due to rising global economic concerns, particularly from tensions in the Middle East that show no signs of abating.
The market is also highlighting the lack of progress in negotiations between the United States and Iran. The US blockade of Iranian ports remains in place, while Tehran insists that a complete lifting of the blockade is a key condition for resuming negotiations. This has made investors skeptical about the possibility of a peace agreement anytime soon.
The situation escalated after Iran attacked three ships in the Strait of Hormuz and seized two of them. These tensions increase the risk of disruptions to global energy supplies, potentially putting additional pressure on the Japanese economy, which is heavily dependent on energy imports.
On the other hand, expectations that the Bank of Japan will maintain its loose interest rate policy at its upcoming meeting also weakened the yen. The combination of dovish monetary policy and external pressures has kept the USD/JPY bullish for the time being. (Zaf)
Source: Newsmaker.id
