USD Strength / Yen Weakness Trend Continues | 159 Yen in Sight, but Watch Iran Sanctions Relief Headlines
■ Market Overview Today
Since the latter half of last week,
the strong USD trend has continued.
The main drivers have been a series of strong U.S. inflation indicators, including:
- U.S. CPI
- U.S. PPI
- Import Prices
In particular, after the upside surprise in PPI,
markets have once again started pricing in a
“delay in Fed rate cuts.”
■ The Core Theme of the Current Market
“A dollar-buying market driven by sticky inflation.”
- Elevated U.S. yields
- Rising oil prices
- Middle East geopolitical risks
→ All continue to support the U.S. dollar.
Meanwhile in Japan,
expectations for an accelerated supplementary budget
are increasing concerns over fiscal deterioration,
adding further pressure on the yen.
→ USD/JPY pullbacks remain shallow.
■ FX Market Moves
- USD/JPY approaching 159
- EUR/USD around 1.16
- EUR/JPY attempting 185
→ Broad-based dollar strength remains dominant.
However,
intervention concerns are still extremely strong
above the 159 level.
■ Middle East Developments
At the same time,
a new development has emerged.
According to Tasnim News,
the United States has proposed a
“temporary waiver plan”
for sanctions on Iranian oil exports.
→ A provisional measure until a final agreement is reached.
If true,
this could ease concerns over global oil supply disruptions.
■ Key Focus Going Forward (Most Important)
- Intervention risks around 159 USD/JPY
- Oil price reactions
- Progress in U.S.-Iran negotiations
- Sustainability of dollar strength
→ Especially important: whether oil prices start to weaken.
■ Possible Scenarios Ahead
① Oil Prices Continue Rising
→ Dollar strength maintained
→ USD/JPY stabilizes above 159
② Progress Toward Sanctions Relief
→ Oil declines
→ Dollar rally cools off
③ Currency Intervention
→ Risk of sharp downside moves
■ Strategic View
- Buy-the-dip bias remains dominant
- Be cautious chasing above 159
- Prioritize oil-related headlines
■ Final Summary
The current market structure remains:
“Strong USD / Weak JPY as the primary trend.”
However,
reports regarding Iran sanctions relief
could potentially shift market sentiment.
→ The most critical factors now are:
The battle around 159 USD/JPY and the direction of oil prices.
