Yen Slides as Oil Prices Surge Amid Escalating Middle East Tensions

The yen weakened against both the US dollar and euro on September 1 due to rising tensions in the Middle East and surging oil prices. The dollar-yen pair stood at 159.79-80, a 23-sen depreciation from the previous day's level of 160.02.

The escalating conflict between the United States and Iran in the region is fueling concerns over supply disruptions, pushing crude oil futures above $86 per barrel. The direct trigger for the yen's decline was the intensifying military action, with US President Trump signaling further strikes against Iran.

Market participants noted that concerns over currency intervention by the Japanese government and the Bank of Japan continue to suppress yen depreciation, capping its decline at around 159-160 range. The BOJ rate hike expectations in September are also contributing to restrained dollar selling.