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WTI jumps on U.S.-Iran worries, lifting USD/JPY

USD/JPY held near recent highs despite weaker-than-expected U.S. inflation, while U.S. and Japan equities sold off as AI valuation concerns resurfaced.

Reported · Written up by our desk · Major Pairs

Renewed U.S.-Iran tensions raised worries about possible disruptions in the Strait of Hormuz, pushing WTI crude oil sharply higher. The higher oil price also weakened the Japanese yen, helping lift USD/JPY.

Action Forex also linked the risk move in currencies and equities to a separate catalyst for market sentiment. U.S. and Japanese stocks fell as investors focused on high valuations in AI-related companies, with attention drawn to Moonshot AI’s new open-source model Kimi K3, which was reported as performing close to leading models from Anthropic and OpenAI.

The same market note pointed to macro data as a counterweight for rate expectations. U.S. inflation was much weaker than expected, reducing expectations for a near-term Fed rate hike, while retail sales were near forecasts and consumer sentiment improved as inflation expectations fell.

In Japan, the outlet said the government’s new economic plan stressed protecting the Bank of Japan’s independence. For USD/JPY, the pair was described as testing recent highs in a quiet week, with resistance cited around 162.50, 163.00 and 165.00, and support around 161.00 and 160.50.

Latest closeWTI crude $79.00 ▼0.8%|USD/JPY 162.33 ▲0.2%

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