The Japanese Yen (JPY) underperformed its major currency peers during the European trading session on Thursday, with the USD/JPY pair trading 0.3% higher to near 159.00 [1]. The Yen faced selling pressure as oil prices gained ground, driven by concerns over the sustainability of the ceasefire between the United States (US) and Iran announced early Wednesday [1]. WTI Oil price rose 2.3% to around $93.30 in European trade, intensifying the impact on currencies from economies like Japan that rely heavily on imported oil [1].
According to the currency heat map, the Japanese Yen was the weakest against the New Zealand Dollar, falling 0.51% [1]. The Yen also declined against other major currencies, including a 0.30% drop versus the US Dollar and a 0.45% drop versus the Euro [1]. Market sentiment was slightly risk-averse, with S&P 500 futures down 0.2% to near 6,770, reflecting weak investor risk appetite amid uncertainty over the US-Iran ceasefire's longevity [1].
Investors expressed doubts about the credibility of the truce, as Israeli Defense Forces continued attacks on Iran-backed Houthis in Lebanon. Iran’s parliament speaker and chief negotiator, Mohammad Bagher Qalibaf, stated that the US violated the first clause of the 10-point proposal, which called for an immediate ceasefire everywhere, including Lebanon and other regions [1]. Qalibaf added that it would be "unreasonable" to continue talks under current conditions [1]. Despite this, both the US and Iran confirmed they are sending teams to Pakistan for the first round of talks scheduled over the weekend [1].
Looking ahead, investors will focus on the US Consumer Price Index (CPI) data for March, which is set to be released on Friday [1].
CONCLUSION
The Japanese Yen's underperformance was driven by rising oil prices and geopolitical uncertainty surrounding the US-Iran ceasefire. Market sentiment remains risk-averse, with investors awaiting key US inflation data for further direction. The ongoing talks between the US and Iran in Pakistan may influence future currency and oil price movements.