USD/JPY jumps to near 144.00 while both currencies advance amid Middle East tensions
- USD/JPY rises to near 144.00 as demand for the US Dollar has increased against the Japanese yen in a risk-off environment.
- Israel strikes Iran to rid-off existing survival threat from Iran.
- The BoJ and the Fed are expected to keep interest rates steady next week.
The USD/JPY pair climbs to near 144.00 during European trading hours on Friday after recovering early losses. The pair strengthens as the US Dollar (USD) outperforms across the board amid growing war tensions between Israel and Iran.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is up almost 0.5% to near 98.35 after recovering from the three-year low of 97.60 posted on Thursday.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.51% | 0.45% | 0.43% | 0.16% | 0.77% | 1.00% | 0.33% | |
| EUR | -0.51% | -0.02% | -0.03% | -0.28% | 0.34% | 0.47% | -0.18% | |
| GBP | -0.45% | 0.02% | -0.04% | -0.33% | 0.28% | 0.47% | -0.13% | |
| JPY | -0.43% | 0.03% | 0.04% | -0.24% | 0.35% | 0.56% | -0.09% | |
| CAD | -0.16% | 0.28% | 0.33% | 0.24% | 0.59% | 0.84% | 0.20% | |
| AUD | -0.77% | -0.34% | -0.28% | -0.35% | -0.59% | 0.21% | -0.42% | |
| NZD | -1.00% | -0.47% | -0.47% | -0.56% | -0.84% | -0.21% | -0.62% | |
| CHF | -0.33% | 0.18% | 0.13% | 0.09% | -0.20% | 0.42% | 0.62% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Theoretically, demand of safe-haven currencies, such as US Dollar and Japanese Yen (JPY) increases amid heightened geopolitical tensions.
Early Friday, Israel launched a series of attacks on military and nuclear facilities in Iran, citing the need to rid itself of the threat of survival. Israeli Prime Minister (PM) Benjamin Netanyahu stated that their military forces launched the Operation Rising Lion to “roll back the Iranian threat to Israel’s very survival”, The Guardian reported.
On the domestic front, investors await the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. According to the CME FedWatch tool, the Fed is almost certain to leave interest rates steady in the range of 4.25%-4.50%. Investors will closely monitor the Fed’s dot plot, which shows where officials see interest rates heading in the medium and long term.
Next week, investors will also focus on the Bank of Japan’s (BoJ) monetary policy announcement. The BoJ is expected to keep interest rates steady at 0.5% on Tuesday and would keep the door open for further interest rate hikes.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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