The Japanese yen rose in the Asian market on Thursday against a basket of major and secondary currencies, extending its gains for the second consecutive day against the US dollar and heading toward touching its highest level in three months, benefiting from weaker demand for the US currency as the best alternative investment amid de-escalation between the United States and Iran and growing hopes of a near peace agreement.

The yens rise comes under the watch of Japanese authorities, who confirmed that Japan faces no restrictions on the pace of its intervention in the foreign exchange market to support the local currency and that it remains in daily contact with US monetary authorities.

Price Overview

Japanese yen exchange rate today: The dollar fell against the yen by about 0.2% to 156.03, from the opening level of 156.33, and recorded a high of 156.53.

The yen ended Wednesdays trading up by 1.0% against the dollar, marking its first daily gain in the past four days, and recorded its highest level in three months at 155.03, amid speculation of continued intervention by the Bank of Japan.

The US dollar

The dollar index fell on Thursday by about 0.15%, extending losses for the second consecutive session and heading toward touching its lowest level in three months, reflecting the continued decline of the US currency against a basket of global currencies.

Risk sentiment improved in global markets, and demand for the US dollar as a safe haven declined, amid easing tensions between the United States and Iran in the Strait of Hormuz and growing hopes of a near peace agreement.

Iran announced on Wednesday that it is reviewing a US peace proposal, and sources indicated that it would formally end the war, but would leave major US demands unresolved, namely Irans suspension of its nuclear program and the reopening of the Strait of Hormuz.

Japanese authorities

Japans top currency diplomat confirmed on Thursday that Japan faces no restrictions on the pace of its intervention in the foreign exchange market to support the local currency and that it remains in daily contact with US authorities.

The remarks by Atsuki Mimura, Vice Finance Minister for International Affairs, came ahead of US Treasury Secretary Scott Bessents visit to Tokyo next week, where he is expected to discuss yen movements with Japanese Finance Minister Satsuki Katayama.

Mimura told reporters: Our focus, consistently and without change, extends in all directions, stressing that Tokyo still sees speculative movements in the currency market.

Sources told Reuters that Japanese authorities intervened in the foreign exchange market last Thursday, and money market data indicate that they sold about $35 billion to support the yen. Since then, the market has witnessed three sudden declines in the value of the yen through Wednesday.

Japanese interest rates

Pricing for the probability of the Bank of Japan raising interest rates by a quarter percentage point at the June meeting is currently stable around 65%.

In order to reprice those probabilities, investors are awaiting the release of more data on inflation, unemployment, and wage levels in Japan.