Trump Shock Easing? “Risk-Off Dollar Buying + Yen Selling” Continues in FX Markets
Tuesday, June 24, 2025
💥 Geopolitical Risk & Market Reaction
At the start of the week, markets were jolted by the unexpected news that the U.S. had used bunker-buster bombs on Iranian nuclear facilities. Though previously hinted at as a “decision within two weeks,” the timing of the strike caught markets off guard and triggered a wave of risk aversion.
Crude oil prices surged initially, then quickly gave up gains
Stock markets began to stabilize, with mixed performance across Asian equities
In FX markets, USD/JPY climbed toward the upper 145 range, and cross-yen pairs were also bought back—clear signs of yen-led risk sentiment
Meanwhile, reports emerged that Iran’s parliament approved a resolution to block the Strait of Hormuz. However, implementation would require approval from the Supreme National Security Council. Given the implications for China-Iran relations, actual execution appears unlikely for now.
💱 FX Outlook
USD buying and JPY selling remain dominant, with the yen and NZD especially weak
The “safe-haven dollar buying” pattern has resumed, supporting the dollar index
Speculation about narrowing U.S.-Japan yield differentials has faded, reviving pressure on the yen
However, any Iranian retaliation targeting U.S. bases in the Middle East could cause another major market shift. In the short term, traders will likely remain highly sensitive to geopolitical headlines.
📊 Key Events & Economic Data Today
June Flash PMIs from Europe and the U.S. are the primary focus:
Region Indicator Forecast Notes
🇫🇷 France Manufacturing & Services PMI Slight improvement Market impact likely limited
🇩🇪 Germany Same Slight improvement Watched closely as a eurozone leader
🇬🇧 UK Same Slight improvement Direct impact on GBP movement
🇺🇸 U.S. Manufacturing PMI Slight deterioration expected Composite PMI at 52.1 (stronger than eurozone)
🇺🇸 U.S. Existing Home Sales Decline expected Likely limited market impact
🎤 Key Speeches
ECB President Lagarde
Fed Governor Waller
NY Fed President Williams
Bundesbank President Nagel
⚠️ Special attention on any shift in tone from Waller and Williams, which could influence USD direction.
🎯 Trader Strategy Notes
Base case remains “Buy USD, Sell JPY”
Short-term trend has shifted toward risk-on sentiment, led by yen weakness
Markets remain highly sensitive to reports regarding the Strait of Hormuz and potential renewed Israeli strikes
Watch for sharp movements following the release of the U.S. PMI, which may become today’s inflection point
