Yen Surges Against Dollar as Oil Prices Plummet

The yen strengthened against the dollar in Tokyo foreign exchange trading on the morning of October 26. As of noon, the dollar-yen pair stood at 159.01-02 yen, up 0.43 yen from the previous day's close. Shortly after 11 a.m., the yen briefly touched around 158.88. Real-demand yen buying and dollar selling by Japanese export-oriented companies and other market participants were seen entering the market.

A decline in U.S. crude oil futures, driven by expectations of de-escalation in Middle East tensions, eased concerns over Japan's trade balance and provided support to the yen. U.S. crude oil futures for October settled at $82.36 per barrel on the 25th, down $2.65 from the previous day.

Market participants noted that dollar selling dominated ahead of the fixing rate settlement, with export-oriented companies and others executing yen-buying and dollar-selling orders. Some stop-loss selling emerged once the pair broke below the 159-yen level.