USD/JPY Stuck at 157, Here's Where to Go Next!
The USD/JPY pair traded within a limited range around 157.00 on Monday, after briefly weakening to 156.60 in the Asian session. This movement occurred as buying interest returned to the US dollar, while concerns about Japanese intervention remained on the Japanese yen.
The US dollar strengthened amid renewed tensions in the Middle East. US President Donald Trump said the United States would begin guiding neutral vessels out of the Strait of Hormuz through an operation called Project Freedom. He also emphasized that any disruption to this process would be met with force.
This statement immediately drew a strong response from Iran. The head of the Iranian Parliament's National Security Commission, Ebrahim Azizi, warned that any US interference in the strategic Strait of Hormuz would be considered a violation of the ceasefire.
In addition to geopolitical factors, the dollar also received support from comments from Fed officials. Minneapolis Fed President Neel Kashkari said a prolonged conflict in Iran could increase inflation risks and damage the economy, even opening the possibility of interest rate hikes if uncertainty continues to rise.
However, USD/JPY's gains are still being held back by concerns about Japanese intervention. Reports suggest Japanese authorities may have intervened around May 1st to support the weakening yen. This situation has prompted market participants to be cautious before pushing USD/JPY higher further. (asd)
Source: Newsmaker.id
