The Japanese yen fell in Asian trading on Thursday against a basket of major and minor currencies, extending its losses for the second consecutive day against the US dollar, as investors turned away from risk and focused on buying the US currency as a preferred safe-haven asset following US President Donald Trumps speech on developments in the Iran war.

With increasing signs of easing inflationary pressures on policymakers at the Bank of Japan, expectations for a Japanese interest rate hike in April have declined, as markets await further economic data from Japan.

Price Overview

Japanese yen exchange rate today: the US dollar rose 0.45% against the yen to 159.48, up from the session opening level of 158.77, after hitting a low of 158.54.

The yen ended Wednesdays session down less than 0.1% against the dollar, marking its first loss in the past three days, after earlier reaching a one-week high of 158.27.

US dollar

The dollar index rose 0.5% on Thursday, resuming gains that had paused over the past two sessions, reflecting renewed strength in the US currency against a basket of global currencies.

Dollar buying as a preferred safe-haven asset resumed following US President Donald Trumps address to the nation regarding developments in the Iran war.

Trumps speech

Trump focused on several key points regarding the trajectory of the Iran war, most notably:

The objectives of the war with Iran are nearly complete, and Tehran no longer poses a real threat.

He may target energy and oil infrastructure if negotiations are not satisfactory.

Major military operations will continue for only two to three more weeks.

The United States does not need Middle East oil, and US oil production will rise significantly soon.

The United States has abundant gas supplies.

The United States does not need the Strait of Hormuz, and the strait will reopen automatically once the conflict ends.

Countries affected by the closure of the Strait of Hormuz should act to protect their interests.

Opinions and analysis

Carol Kong, currency strategist at Commonwealth Bank of Australia, said Trumps remarks did not reassure markets, noting that markets are beginning to realize that the war is likely to escalate before it de-escalates.

Kong added that the US dollar is expected to rise further against all major currencies, especially as markets recognize that the global economy will experience a noticeable slowdown.

Japanese interest rates

Data released this week in Japan showed a slowdown in core inflation in Tokyo during March, in the latest sign of easing inflationary pressures on policymakers at the Bank of Japan.

Following the data, markets reduced pricing for the probability of a quarter-point rate hike by the Bank of Japan at the April meeting from 25% to 15%.

To reassess these expectations, investors are awaiting further data on inflation, unemployment, and wages in Japan.