The Japanese yen rose in Asian trading on Wednesday against a basket of major and minor currencies, extending its gains for the third consecutive day against the US dollar and hitting its highest level in a week, benefiting from the continued decline in the US currency amid growing optimism over an end to the Iran war, especially following recent statements by Donald Trump.

As signs of easing inflationary pressures on policymakers at the Bank of Japan increase, expectations for a Japanese interest rate hike in April have declined, with investors awaiting further economic data from Japan.

Price Overview

Japanese yen exchange rate today: the US dollar rose about 0.2% against the yen to 158.45, up from the session opening level of 158.72, after reaching a high of 158.84.

The yen ended Tuesdays session up 0.6% against the dollar, marking its second consecutive daily gain, as recovery continues from a 20-month low of 160.46.

Aside from buying from lower levels, the yen gained after less aggressive remarks from the US administration regarding the course of the Iran war.

Over the course of March trading, the yen declined 1.75% against the US dollar, marking its second consecutive monthly loss, due to investors focusing on buying the US currency as a preferred safe-haven asset.

US dollar

The dollar index fell 0.2% on Wednesday, extending its losses for the second consecutive session and moving away from a ten-month high, reflecting the continued decline in the US currency against a basket of global currencies.

Aside from profit-taking activity, the US dollar weakened amid growing optimism over a potential end to the Iran war, particularly following recent remarks by US President Donald Trump.

Trump said on Tuesday that the United States could end its military campaign against Iran within two to three weeks. He added that Tehran is not required to reach an agreement as a precondition for ending the conflict.

US Secretary of State Marco Rubio told Fox News that the United States sees the finish line of the war with Iran.

The White House announced that US President Donald Trump will deliver an address to the nation to provide important updates on Iran at 09:00 PM Eastern Time on Wednesday (01:00 GMT Thursday).

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.