The Japanese yen strengthened in Asian trading on Monday against a basket of major and minor currencies, moving further away from its six-week lows against the US dollar as bargain buying emerged and market sentiment improved following the announcement of a framework agreement between the United States and Iran aimed at ending the conflict in the Middle East.

Later today, the Bank of Japan will begin its fourth monetary policy meeting of 2026, with policy decisions due on Tuesday. Markets widely expect the central bank to raise interest rates by 25 basis points to 1.0%, which would mark the highest level since 1995.

The Price

Japanese yen exchange rate today: The dollar fell about 0.3% against the yen to 159.73, down from Friday's closing level of 160.19, after reaching an intraday high of 160.23.

The yen ended Friday down 0.2% against the dollar, resuming losses that had paused the previous day as part of a recovery from a six-week low of 160.60.

US dollar

The US Dollar Index fell 0.4% on Monday, hitting a two-week low of 99.42 and reflecting broad weakness in the US currency against a basket of global peers.

Risk sentiment improved across global markets after US and Iranian officials announced agreement on a framework to end the conflict, lift the US blockade on Iran, and reopen the Strait of Hormuz.

Global oil prices

Oil prices dropped more than 4% on Monday, extending losses for a third consecutive session and falling to their lowest levels in three months as concerns about supply disruptions from the Middle East eased following the reopening of the Strait of Hormuz.

Developments in the Iran conflict

The United States and Iran reached a preliminary agreement to end the conflict, with a formal signing expected on Friday in Geneva.

President Donald Trump confirmed the deal and announced the lifting of the naval blockade on Iranian ports, alongside the reopening of the Strait of Hormuz to global shipping traffic.

Pakistani Prime Minister Shehbaz Sharif, described as the key mediator, said the agreement includes an immediate and permanent ceasefire across all fronts, including the Lebanese front.

Mediators have set Friday, June 19, 2026, as the date for the official signing ceremony between US and Iranian delegations in Switzerland.

Under the draft agreement, Tehran has pledged not to pursue nuclear weapons and will accept strict inspection measures.

Iran's Mehr News Agency reported that the memorandum of understanding includes 60 days of negotiations on the nuclear issue and calls for the release of $24 billion in frozen Iranian assets during the talks.

Bank of Japan

The Bank of Japan begins its fourth monetary policy meeting of 2026 later today, with a decision expected on Tuesday. Markets anticipate a 25-basis-point rate increase to 1.0%, the highest level since 1995.

Such a move would bring the Bank of Japan more in line with other major central banks that have adopted a more hawkish stance, including the European Central Bank, which raised interest rates last week.

Investors will also be looking for additional guidance on whether the central bank intends to continue raising rates in the coming months to address inflationary pressures linked to the Middle East conflict.