The Japanese yen hovered close to the critical 160 per dollar mark on Monday as investors assessed developments in the escalating Iran war, with attention focused on the latest deadline issued by U.S. President Donald Trump for the reopening of the Strait of Hormuz.
The currency remained steady at 159.55 per U.S. dollar, staying near the 21-month low reached last week.
Market participants are closely watching for possible intervention by Japanese authorities following strong warnings from officials in recent days.
Japanese Finance Minister Satsuki Katayama on Friday cautioned currency traders, stating that the government is prepared to act against speculative activity in foreign exchange markets as volatility has increased “significantly.”
However, doubts persist over the effectiveness of any intervention, as geopolitical tensions in the Middle East continue to drive strong demand for the safe-haven dollar. The yen has declined by 1.5% since the conflict began, remaining close to the 160 level.
Speculative traders have also increased their short positions on the yen, with recent weekly data showing a $5.7 billion short position — the highest level since July 2024, when Japan last stepped into the foreign exchange market.
In an Easter Sunday social media post, Trump warned of potential strikes on Iran’s power plants and bridges if the strategic waterway is not reopened, setting a deadline of 8 p.m. Tuesday Eastern Time (0000 GMT).
Meanwhile, the euro traded at $1.1523, while sterling stood at $1.3211. The dollar index, which tracks the U.S. currency against six major counterparts, edged slightly lower to 100.12.
The Australian dollar rose by 0.3% to $0.69045, hovering near the two-month low recorded last week.