The Japanese yen weakened against major and minor currencies in Asian trading on Monday, extending its losses for a second consecutive session against the US dollar and falling to its lowest level in six weeks. The decline was driven by a risk-off mood in global markets as geopolitical tensions escalated in the Middle East following a renewed exchange of military strikes between Iran and Israel.

With the yen now trading beyond the closely watched 160 per dollar level, expectations are growing that Japanese authorities may intensify warnings against excessive currency moves, while speculation is increasing that policymakers could intervene to support the currency and slow its decline.

Price action

USD/JPY rose about 0.15% to 160.39, the highest level since April 30, after opening at 160.19 and touching an intraday low of 160.14.

The yen ended Friday down 0.2% against the dollar, marking its fifth loss in the past six sessions, following the release of stronger-than-expected US employment data.

The Japanese currency lost 0.65% against the dollar last week, its fourth consecutive weekly decline, pressured by higher US Treasury yields and reduced expectations for a Japanese interest rate increase in June.

US dollar

The US Dollar Index gained 0.1% on Monday, extending its advance for a second straight session and reaching a two-month high of 100.17 points, reflecting continued strength in the US currency against a basket of major global currencies.

Strong US jobs data released on Friday reinforced investor expectations that the Federal Reserve may continue normalizing monetary policy and raise interest rates later this year.

The dollar also benefited from renewed safe-haven demand as military tensions between Iran and Israel intensified, threatening the fragile ceasefire arrangement in the Middle East.

Oil prices

Global oil prices climbed more than 3% on Monday, resuming the strong gains that paused over the previous two sessions and moving toward their highest levels in several weeks.

The rally was driven by renewed concerns over potential supply disruptions in the Middle East amid the latest military exchanges between Iran and Israel.

Developments in the Iran-Israel conflict

Iran and Israel exchanged military strikes, raising concerns about the stability of the fragile ceasefire in the region.

Irans Islamic Revolutionary Guard Corps launched multiple waves of ballistic missiles targeting Israeli positions, including the Ramat military base, in response to airstrikes on Beiruts southern suburbs.

The Israeli military said it intercepted the missiles while activating nationwide air raid sirens and placing hospitals and schools on maximum alert.

US President Donald Trump reportedly held an urgent phone call with Israeli Prime Minister Benjamin Netanyahu, urging restraint and discouraging an immediate military response.

Israeli warplanes carried out intensive strikes against military targets and other locations in Tehran, with large explosions reported across the capital.

Trump informed Israeli officials that Washington was close to reaching a final agreement with Tehran through Pakistani mediation and requested several additional days for diplomacy to proceed.

The ceasefire between the United States and Iran has technically remained in effect since early April.

Trump delivered a stern message to Tehran, saying: Youve launched your missiles. Thats enough. Return to the negotiating table immediately.

Trump also stated that the latest Israeli and Iranian strikes would not derail efforts to reach a peace agreement.

160 intervention zone

Japanese authorities continue to closely monitor currency markets as the yen trades beyond the critical 160 per dollar threshold, a level widely viewed as a potential trigger for official intervention.

According to Reuters sources, Tokyo intervened several times in late April and early May to support the yen. During that period, the exchange rate weakened to 160.72 per dollar, its lowest level since July 2024.

Japanese officials have repeatedly warned against excessive currency volatility and stressed that authorities stand ready to take decisive action against disorderly market movements.

Finance Minister Satsuki Katayama reiterated that the government remains prepared to take appropriate measures should speculative or excessive currency fluctuations emerge.