Yen Slides to Weakest Since July 2024 as Iran War Escalates

The yen fell to its weakest level since July 2024 as a deepening war in the Middle East pushes up oil prices.

The Japanese currency inched 0.1% lower to 159.46 against the greenback as Brent oil traded near $100 a barrel following one of the most volatile trading weeks ever. Investors are bracing for more upheaval as Iran pledged to keep the Strait of Hormuz effectively shut.

Higher crude oil prices are adding pressure to inflation in Japan, which is heavily dependent on Middle Eastern petroleum. Meanwhile, the has stood out as the asset of choice as investors rush to safety.

The slide in the yen brings it closer to levels where authorities previously intervened to support the currency. Still, strategists see a high for intervention as the Iran conflict and resilient US data have pushed the dollar higher on fundamental grounds.

Japanese Finance Minister Satsuki Katayama told reporters on Friday that financial authorities are staying in closer contact with their US counterparts than usual, and that she would refrain from commenting on the topic of currency intervention. Officials have indicated they are more concerned about volatility and the pace of currency moves rather than specific levels.

Prime Minister Sanae Takaichi ’s resounding lower house election victory last month briefly supported the yen, but the currency has since come under renewed pressure following media reports that she is wary of further interest-rate hikes and her nomination of two dovish Bank of Japan board members.