The Japanese yen edged higher in Asian trading on Tuesday against a basket of major and minor currencies as it attempted to recover from a six-week low against the US dollar. However, the currency remains within the intervention zone beyond 160 per dollar, a level widely viewed as a key threshold for potential action by Japanese monetary authorities to support the local currency.

The yen was supported by a weaker US dollar and lower global oil prices after Iran and Israel announced a halt to their exchange of strikes in response to a request from US President Donald Trump, who also reaffirmed that peace negotiations are continuing and that a final agreement between Washington and Tehran may be approaching.

Price overview

Japanese yen exchange rate today: The US dollar fell by about 0.1% against the yen to 160.08, down from an opening level of 160.17. The session high was recorded at 160.28.

The yen closed Mondays trading up about 0.1% against the dollar after earlier touching a six-week low of 160.39.

The 160 threshold

Japanese authorities are closely monitoring movements in the foreign exchange market, particularly as the yen remains weaker than the critical 160-per-dollar level, which has long been viewed as a point that could trigger official intervention.

According to Reuters sources, Tokyo intervened several times in late April and early May to halt the yens decline. At that time, the exchange rate reached 160.72 per dollar, the weakest level since July 2024.

Japanese officials have repeatedly warned against excessive volatility in the yen and indicated that authorities could take decisive action against disorderly currency movements.

Finance Minister Satsuki Katayama reaffirmed that the government is ready to take appropriate measures if foreign exchange markets experience excessive or speculative moves.

US dollar

The US Dollar Index declined by about 0.1% on Tuesday, extending losses for a second consecutive session and moving further away from the two-month high of 100.21 points, reflecting continued weakness in the US currency against a basket of global currencies.

In addition to profit-taking activity, the dollar came under pressure after Trump successfully brokered a halt to the exchange of military strikes between Iran and Israel, while emphasizing continued commitment to the diplomatic path to end the conflict and contain geopolitical tensions in the Middle East.

Oil prices

Oil prices fell by more than 1% on Tuesday as military tensions between Iran and Israel eased, boosting expectations that a broader peace agreement in the Middle East may be near. Such an agreement could contribute to reopening the Strait of Hormuz to stranded oil tankers and restoring supply flows to normal levels.

Iran conflict developments

Iran and Israel announced a temporary halt to military strikes.

US President Donald Trump urged both sides to cease hostilities immediately.

Israel believes that the brief confrontation may strengthen its position in negotiations.

Israel has largely been excluded from the ongoing US-Iran peace talks.

Pakistani Prime Minister Shehbaz Sharif stated that the ultimate objective of peace negotiations between Washington and Tehran is close to being achieved.

Trump and Vice President JD Vance said Washington expects to declare a complete victory and reach a long-term settlement of the Iranian nuclear issue within the next two weeks.

Japanese interest rates

With oil prices declining, market pricing for a 25-basis-point rate hike by the Bank of Japan at its June meeting eased from 85% to 75%.

Investors are now awaiting additional data on inflation, unemployment, and wage growth in Japan to reassess those expectations.

The Bank of Japan is scheduled to meet on June 1516 to evaluate the appropriate monetary policy tools for the worlds fourth-largest economy.