Yen and Dollar Drift as Iran Deal News and U.S. Payrolls Loom

Currency markets were relatively quiet on Thursday as investors awaited more details on a proposed U.S.-Iran deal and looked ahead to Friday's U.S. jobs report.

The Japanese yen, which had gained some traction due to intervention efforts, gave back some of its gains and traded at 157.88 per dollar. It has now retreated from the 155.20 per dollar level reached on Monday but remains well off a multi-decade low of almost 164 reached in July.

Jonas Goltermann, chief markets economist at Capital Economics, said that stretched positioning, U.S. involvement, and the yen's historical undervaluation all suggest that the current round of intervention has a better chance of propping up the yen for longer than some previous ones.

The dollar index edged higher after hitting a six-week low on Monday, trading at 99.76. However, markets remained cautious as tensions continued to play out in the Gulf, with Reuters reporting a proposed deal between Iran and Oman that could give Tehran control over inbound traffic through the Strait of Hormuz.

Brent crude futures were steady at around $79.50 a barrel, near levels last seen when the U.S. and Iran signed an interim peace agreement in June. Market participants are now turning their focus to U.S. payroll data that could provide more clues on the Federal Reserve's interest rate path.