Yen Slides as Markets Await US-Iran Deal, Jobs Report

Currency markets were relatively stable on Thursday, but investors remain cautious due to ongoing tensions in the Gulf and uncertainty surrounding a proposed U.S.-Iran deal. The Japanese yen retreated slightly from its intervention-led gains, trading at 157.88 per dollar after modest declines over the past two sessions. While it has given back some of its recent gains, the yen remains well off its multi-decade low of almost 164 reached in July.

Analysts believe that stretched positioning and the involvement of the U.S. government have improved the chances of propping up the yen for longer than previous interventions. The euro was steady at $1.1544, while sterling traded down 0.1% at $1.3454. The New Zealand dollar and Australian dollar were both 0.2% weaker.

Markets are keeping a close eye on developments in the Gulf, where tensions continue to rise following reports of a proposed deal between Iran and Oman to help end the U.S.-Iran conflict. However, there was no immediate U.S. comment on the proposal, with President Donald Trump saying that a deal to reopen the strait was imminent.

Investors are also looking ahead to Friday's U.S. jobs report, which could provide more clues on the Federal Reserve's interest rate path. A Reuters survey of economists expects nonfarm payrolls to increase by 80,000 jobs in July after rising 57,000 in June.