The Japanese yen declined in the Asian market on Monday against a basket of major and minor currencies, retreating from a four-week high against the U.S. dollar due to active correction and profit-taking, alongside renewed buying of the American currency as a preferred alternative investment.

This comes amid escalating tensions between the United States and Iran over control of the Strait of Hormuz, and Tehran's continued refusal so far to participate in a new round of negotiations scheduled to be held in Pakistan later today.

Despite the current rise in global oil prices, the probability of the Bank of Japan (BoJ) raising interest rates during the April meeting remains low, especially after Governor Kazuo Ueda refrained from pledging to normalize monetary policy in the near term due to the impact of the Iranian war on economic forecasts.

Price Overview

- Japanese Yen Exchange Rate Today: The dollar rose against the yen by approximately 0.4% to (159.20), from Friday's closing price of (158.59), and recorded a low during today's trading of (158.74).

- The yen ended Friday's trading up by 0.35% against the dollar, marking its first gain in three days and hitting a four-week high of 157.59 yen after Iran's announcement to open the Strait of Hormuz to global navigation.

- Last week, the Japanese yen achieved a gain of approximately 0.45% against the U.S. dollar, marking its third consecutive weekly gain thanks to the Iranian war truce.

The U.S. Dollar

The dollar index rose on Monday by 0.15%, extending its gains for the third consecutive session and reaching its highest level in nearly a week, reflecting the continued ascent of the American currency against a basket of global currencies.

This rise comes amid renewed buying of the U.S. dollar as a top alternative investment, given the escalating tensions between the United States and Iran and the diminishing chances of reaching a peace agreement in the Middle East.

Iranian War Updates

- The Iranian Navy announced the re-closing of the Strait of Hormuz as of Saturday afternoon until the U.S. blockade imposed on Iranian ships is lifted.

- U.S. President Donald Trump stated that the U.S. Navy intercepted the Iranian-flagged cargo ship "Tosca" in the Gulf of Oman.

- Tehran considered the attack on the ship an "act of maritime piracy" and a flagrant violation of the ceasefire agreement, vowing to respond to this escalation.

- While the Pakistani capital, Islamabad, prepares to host a second round of peace negotiations later today, Iran refuses to participate in this round so far.

- Several international and regional parties are pressuring Tehran to participate in the peace negotiations before the two-week ceasefire agreement expires tomorrow, Tuesday.

Global Oil Prices

Global oil prices rose on Monday by more than 5% as part of a strong recovery from a four-week low, amid renewed fears of supply disruptions from the Arabian Gulf region, especially after the re-closing of the Strait of Hormuz to oil tankers.

Undoubtedly, the rise in global oil prices renews fears of accelerating inflation, which may prompt global central banks to raise interest rates in the near terma sharp shift from pre-war expectations of cutting or holding rates steady for a long period.

Japanese Interest Rates

- BoJ Governor Kazuo Ueda refrained from pledging to raise interest rates in April, given the war's impact on economic forecasts.

- The pricing of the probability of the Bank of Japan raising interest rates by a quarter-percentage point at the April meeting is currently stable around 10%.

- To re-price those probabilities, investors await the release of more data on levels of inflation, unemployment, and wages in Japan.