The Japanese yen rose in Asian trading on Friday against a basket of major and minor currencies, in an attempt to recover from a one-week low against the US dollar, benefiting from a slowdown in the US currency after Donald Trump announced a new delay in targeting Iranian energy facilities, which renewed hopes of reaching a ceasefire agreement in the Middle East.

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 0.2% against the yen to 159.46, down from the session opening level of 159.78, after reaching a high of 159.79.

The yen ended Thursdays session down 0.2% against the dollar, marking its third consecutive daily loss, and hitting a one-week low of 159.85, due to fading hopes for a ceasefire in the Middle East.

US dollar

The dollar index fell 0.1% on Friday, heading toward its first loss in the past four 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 announced an extension of the delay in strikes on Iranian energy facilities for an additional 10 days, through April 6, noting that negotiations to end the war are progressing very well.

US Special Envoy Steve Witkoff confirmed that a 15-point peace proposal had been presented to Tehran via Pakistan, which is acting as a mediator alongside Egypt and Turkey.

The proposal includes a ceasefire and sanctions relief in exchange for Iran abandoning its nuclear program and reopening the Strait of Hormuz.

Iranian sources described the US proposal as unfair and one-sided, while state media expressed doubts about Washingtons seriousness, stressing that attacks will not stop without real guarantees.

The Wall Street Journal reported on Thursday that the Pentagon is also considering sending up to 10,000 additional ground troops to the Middle East.

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.