Yen Plunges to Three-Week Low Amid Fears of Iran Conflict

The Japanese yen fell to a three-week low against the US dollar in the European market on Tuesday, sparking speculation about potential intervention by monetary authorities. The yen is approaching the key threshold of 160 yen per dollar, with the dollar rising 0.2% against the yen to ¥159.78.

The decline comes amid fears of renewed conflict between the United States and Iran following the expiration of a temporary ceasefire. Global oil prices rose around 0.5% on Tuesday, extending their gains for a third consecutive day, as negotiations between the two countries stalled.

The yen's losses against the dollar have been steady over the past few days, with the currency ending Monday down 0.1% against the greenback. Market pricing for a 25-basis-point interest rate hike by the Bank of Japan at its September meeting remains above 80%, driven by higher global bond yields and growing speculation about potential rate increases.