Yen Weakens, Hormuz Under Pressure
The Japanese yen weakened again against the US dollar on Wednesday (July 8th). USD/JPY moved closer to 162.5, pushing the yen back closer to its 40-year low. This weakening occurred as the US dollar received support from safe-haven demand after the United States launched new airstrikes on Iran.
Tensions escalated after attacks on ships passing through the Strait of Hormuz triggered a US military response. This escalation pushed up oil prices and reignited concerns about global inflation. For Japan, the rising oil prices pose a significant pressure because the country is heavily dependent on energy imports from the Middle East.
Pressure on the yen also came from market participants' continued willingness to take positions against the Japanese currency. The lack of concrete intervention from Japanese authorities has led investors to believe the yen remains vulnerable to weakening. However, the market remains cautious, as USD/JPY levels above 160 have often been associated with potential intervention from Tokyo.
Japanese Finance Minister Satsuki Katayama reiterated that the government is ready to intervene in the foreign exchange market if necessary. He also stated that Japan and the United States remain in close communication regarding currency policy. However, many investors believe that intervention alone will not be enough to provide a long-term recovery for the yen, as long as the dollar remains strong and oil prices continue to pressure the Japanese economy. (asd)
Source: Newsmaker.id
