Dollar Hovers Near Six-Week Lows as Middle East Diplomacy Boosts Optimism

The Japanese yen steadied after recent intervention efforts from Japan and the US Treasury Department. The dollar held near six-week lows due to fresh optimism over a possible diplomatic off-ramp in the Middle East conflict.

Treasury Secretary Scott Bessent said that the US would do 'whatever it takes' to support Japan's yen stabilization efforts, echoing joint intervention by Washington and Tokyo last week. The yen remained above 40-year lows around 164 per dollar, but its value did ease slightly after Monday's high of 155.20.

Experts speculate that the market may be skeptical about how long the effects of recent interventions will last. Mark Dowding, chief investment officer for RBC BlueBay's fixed income team, believes a normalisation in BOJ policy is needed to turn the tide for the Japanese currency.