The Japanese yen rose in Asian trading on Thursday against a basket of major and minor currencies, beginning to recover after two days of losses against the US dollar, benefiting from a slowdown in the US currency, as traders assess the likelihood of a halt in the Iran war.

As inflationary pressures on policymakers at the Bank of Japan ease, expectations for a Japanese interest rate hike in April have declined. To reassess those expectations, investors are awaiting further data on developments in the worlds fourth-largest economy.

Price Overview

Japanese yen exchange rate today: the US dollar fell 0.1% against the yen to 159.33, down from the session opening level of 159.46, after reaching a high of 159.54.

The yen ended Wednesdays session down 0.5% against the dollar, marking its second consecutive daily loss, amid uncertainty over Irans response to a US proposal that includes a one-month ceasefire.

US dollar

The dollar index fell 0.1% on Thursday, marking its first decline in the past three sessions, reflecting a slowdown in the US currency against a basket of global currencies.

This comes as traders assess the likelihood of a halt in the war in the Middle East, amid intensified diplomatic efforts aimed at containing the escalation, with cautious anticipation of any signals that could pave the way for a de-escalation agreement or ceasefire.

Iran war developments

US President Donald Trump said that Iran is making strong efforts to reach an agreement to end nearly four weeks of fighting, contradicting remarks by Irans foreign minister, who said the country is reviewing a US proposal but does not intend to hold talks to end the conflict.

Iranian Foreign Minister Abbas Araghchi said that although there is no dialogue or negotiations with the United States, various messages have been exchanged through intermediaries.

Araghchi added in an interview with state television on Wednesday that conveying messages through friendly countries and clarifying positions or issuing necessary warnings does not constitute negotiations or dialogue.

Trump later said on Wednesday during an event in Washington that Iranian leaders are negotiating and are eager to reach a deal, but are reluctant to say so publicly.

The New York Times reported that the United States has sent Iran a plan consisting of 15 key points to end the war in the Middle East.

Sources said a one-month ceasefire will be announced under a mechanism being developed by Witkoff and Kushner, with negotiations on the fifteen points to take place during the ceasefire period.

Japanese interest rates

Data released this week showed a slowdown in core inflation in Japan during February, 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 30% to 15%.

To reassess these expectations, investors are awaiting further data on inflation, unemployment, and wages in Japan.