The Japanese yen rose in the Asian market on Monday against a basket of major and minor currencies, extending its gains for the second consecutive day against the U.S. dollar. The currency is benefiting from a slowdown in the American dollar's levels following an Axios report stating that Iran has submitted a new peace proposal to the United States.

The yen's move into positive territory comes ahead of the Bank of Japan's (BoJ) monetary policy meeting starting later today, where interest rates are widely expected to remain unchanged for the third consecutive meeting.

Price Overview

- Japanese Yen Exchange Rate Today: The dollar fell against the yen by approximately 0.1% to (159.20), from todays opening price of (159.30), after reaching a high of (159.60).

- The yen ended Friday's trading up 0.2% against the dollar, marking its first gain in five days as it recovered from a nearly two-week low of 159.85 yen.

- Over the past week, the yen lost approximately 0.5% against the dollar, its first weekly loss in a month, driven by escalating tensions between the United States and Iran.

The U.S. Dollar

The dollar index fell by 0.1% on Monday, continuing its decline for the second consecutive session and moving away from nearly two-week highs. This reflects a persistent slowdown in the U.S. currency against global rivals.

The decline in the dollar comes amid improved risk sentiment and cooling demand for the currency as a safe-haven asset, particularly following the Axios report regarding Iran's diplomatic overture. Axios, citing sources, reported that Iranvia Pakistani mediatorssubmitted a new proposal to the U.S. to reopen the Strait of Hormuz and end the war, while deferring nuclear negotiations to a later stage.

Bank of Japan

The Bank of Japan's third monetary policy meeting of 2026 begins later today, with decisions set to be announced tomorrow, Tuesday. Markets expect the central bank to keep interest rates steady for the third consecutive meeting.

The bank will discuss recent economic developments in the world's fourth-largest economy. Markets are closely watching for any shift in stance regarding interest rates and yield curve control in light of global variables, particularly the repercussions of the Iranian war and high energy prices.

Reuters reported that the BoJ is likely to refrain from hiking rates during this meeting, as the uncertainty surrounding the Middle East conflict continues to cloud the economic and price outlook.

Japanese Interest Rates

- Governor Kazuo Ueda has recently refrained from committing to an April rate hike, citing the war's impact on economic projections.

- Market pricing for a 25-basis-point rate hike at this week's meeting remains stable at 10%, while the probability of a hike at the June meeting is priced at 35%.