Forex
Home›Forex›Major Pairs›USD/JPY rises as US-Iran tensions lift the safe-haven…
USD/JPY rises as US-Iran tensions lift the safe-haven dollar
The pair trades near 159.25 to 159.30, supported by a broad rise in the dollar after fresh Iran sanctions threats and renewed bets on US rate hikes in 2026.
The USD/JPY pair strengthened during the first half of the European session on Monday, after an earlier intraday slide into the mid-158.00s, rising more than 75 pips. Spot prices were last around 159.25 to 159.30, up nearly 0.25% for the day, as the US dollar firmed.
FXStreet said the prospect of escalating US-Iran tensions has kept a war-risk premium elevated, supporting demand for the safe-haven buck and helping the dollar move away from an over three-month low. The outlet tied the backdrop to US Treasury Secretary Scott Bessent scheduled to announce what he called the toughest sanctions in history on Iran, alongside warnings from Iran that it would halt oil exports through the Strait of Hormuz and other Persian Gulf routes if economic war continues.
Traders are also watching US policy expectations, with FXStreet noting markets are pricing a greater chance of at least one US Federal Reserve interest rate hike in 2026 amid inflation concerns linked to volatile oil prices. This week, the dollar response may hinge on the US Personal Consumption Expenditures Price Index data and a speech from Fed Chair Kevin Warsh at the Jackson Hole Symposium.
On the yen side, the firm also pointed to a wide interest rate gap between Japan and other major economies, plus concerns about Japan's worsening fiscal condition, as factors weighing on the Japanese yen. FXStreet added that the Bank of Japan's policy, including its influence on currency control and the differential between Japanese and US bond yields, remains central to USD/JPY moves.
Latest closeUSD/JPY 159.31 ▼0.1%