Key facts
- The Japanese yen fell to the 160 per dollar level on Wednesday.
- Japanese authorities issued verbal warnings against excessive yen weakness.
- U.S. forces conducted strikes on Qeshm Island in response to Iran launching ballistic missiles.
- Bank of Japan Governor Ueda signaled potential interest rate hikes if inflation risks outweigh economic downside.
- U.S. job openings increased significantly in April.
The Japanese yen fell back to the key 160 per dollar level on Wednesday, driven by underlying dollar strength and renewed Middle East tensions. U.S. forces conducted strikes on Qeshm Island in response to Iran launching ballistic missiles. This geopolitical uncertainty bolstered demand for the U.S. dollar, a safe-haven asset, while the yen tends to weaken as oil prices rise due to Japan's energy import reliance. Japanese authorities, including Prime Minister Sanae Takaichi, issued verbal warnings, keeping traders alert for potential intervention. Bank of Japan Governor Ueda's comments suggested a readiness to discuss raising interest rates if inflation risks outweigh economic downside. In broader currency markets, the euro and sterling eased slightly against the dollar. U.S. job openings data for April showed a significant increase, potentially influencing the Federal Reserve's monetary policy stance. Bitcoin and ether also slid to multi-month lows amid the risk-off sentiment.