Yen Rises Amid Oil Price Volatility and Escalating Conflict
The Japanese yen has become a safe-haven asset as investors seek refuge from global market volatility. The yen has risen to its strongest level since February, reaching 153.65 per US dollar. This surge has kept the US dollar on the defensive and pushed it lower against other major currencies.
The increase in oil prices to over $99.37 per barrel, driven by the widening conflict in the Middle East, has contributed to the yen's strength. The Iranian-backed Houthis launched strikes on several Saudi cities, while US forces hit multiple Iranian oil tankers and Iran targeted a US base in Jordan.
Analysts expect the Bank of Japan to raise interest rates by 25 basis points at its September 17-18 meeting, which could further support the yen's rally. However, much depends on the market's pricing of the Federal Reserve's trajectory of interest rates, according to Aninda Mitra, head of Asia macro and investment strategy at BNY Investments.
The Australian dollar rose 0.12% to $0.7225, just shy of its four-month high, while the New Zealand dollar was 0.16% higher at $0.5862.