Japan Steps In to Rescue Falling Yen as Iran War Hammers Energy-Dependent Currencies

The Japanese yen has been sliding since late February, when U.S.-Israeli strikes on Iran triggered the closure of the Strait of Hormuz, driving up energy costs and battering currencies of oil-importing nations. After the yen hit its weakest level against the dollar since July 2024, Japanese authorities intervened Thursday, buying yen and sparking its biggest weekly gain in over two months. The currency was last trading at 157.21 per dollar, on course for a 1.35% weekly jump, while the dollar index edged up 0.05%. Japan's top currency official Atsushi Mimura warned Friday that speculative positions remain in markets and further intervention is possible during the upcoming Golden Week holidays. Analysts cautioned the impact may be short-lived given weak underlying fundamentals. Both the European Central Bank and the Bank of Japan held rates unchanged but signaled readiness to raise them as early as June to address surging imported energy costs.