The Japanese yen fell in Asian trading on Tuesday against a basket of major and minor currencies, continuing its losses for the second consecutive day against the US dollar and approaching the point of trading below the 160 yen level. This is as the focus of investors is currently directed toward buying the American currency as a preferred alternative investment, with the approaching end of Donald Trumps deadline to reopen the Strait of Hormuz later today.

Data released today in Tokyo showed the continued contraction of Japanese household spending in February for the third consecutive month, in the latest indicators of the receding of inflationary pressures on monetary policy makers in the Japanese central bank.

Price overview

- Japanese yen exchange rate today: the dollar rose against the yen by 0.15% to (159.93), from the opening price of the day at (159.68), and recorded the lowest level at (159.56).

- The yen ended Mondays trading down by 0.1% against the dollar, in the third loss within the last four days, due to fears of the escalation of the Iranian war.

US dollar

The dollar index rose on Tuesday by 0.15%, to approach its highest levels in several months, reflecting the rise of the American currency against a basket of global currencies.

Buying operations of the US dollar are active as it is the best investment haven, in light of traders anticipation of the deadline set by Washington to reopen the Strait of Hormuz to navigation, with increasing fears of Iranian infrastructure being subjected to attacks in the event of non-compliance.

Iran war updates

- Trump threatens to target civilian infrastructure if Iran does not comply with the deadline later today, Tuesday.

- The Wall Street Journal: Trump in his private talks with officials has become less optimistic about Iran concluding a deal.

- The Wall Street Journal: The gap between the positions of Washington and Tehran cannot be narrowed before the expiration of Trumps deadline.

- Axios: Trump may postpone the attack on Iran if he senses real signs of a deal looming on the horizon.

- Axios: Trump alone is the owner of the decision to begin the destruction of Iranian infrastructure at eight in the evening Tuesday.

Gloomy data

Data today, Tuesday, in Tokyo showed the fall of household spending in Japan by 1.8% on an annual basis in February, worse than market expectations of a fall of 0.8%, and spending recorded a fall of 1.0% in January, in the third consecutive monthly contraction.

The contraction of consumer spending in Japan paves the way for the fall of prices and the slowing of the pace of inflation during the coming period. And there is no doubt that the receding of inflationary pressures on monetary policy makers in the Central Bank of Japan reduces the chances of conducting increases in Japanese interest rates during the coming period.

Japanese interest rates

- Following that data, the pricing of the probabilities of the Japanese central bank raising interest rates by a quarter of a percentage point in the April meeting fell from 15% to 10%.

- In order to re-price those probabilities, investors await the release of more data about the levels of inflation, unemployment, and wages in Japan.