FX.co ★ Yen Slips as Oil Prices Rise

The Japanese yen weakened beyond 158.5 per dollar on Tuesday, giving back part of the previous session’s gains as oil prices recovered some of Monday’s losses, sustaining pressure on Japan’s oil‑importing economy. The currency moves followed Iran’s denial that it was engaged in any talks to end the conflict, contradicting claims by President Donald Trump.

On Monday, the yen had strengthened about 0.5% after Trump postponed, for five days, planned strikes on Iranian energy infrastructure, citing “productive” discussions with Iran over the prior two days.

On the domestic front, data showed that core inflation rose 1.6% in February, the smallest increase since March 2022, reflecting government measures to ease living costs. However, higher energy prices stemming from the Iran war could push inflation higher in the coming months. The subdued inflation reading provided little incentive for any change in monetary policy after the Bank of Japan left interest rates unchanged last week.