Yen Surges on Optimism for Strait of Hormuz Deal

The yen has continued its upward trend after joint intervention by Tokyo and Washington last week to shore up the currency. Treasury Secretary Scott Bessent told CNBC that the U.S. and Iran could reach a deal to open the Strait of Hormuz on Tuesday or Wednesday, which would allow commercial ships to move freely through the strait.

The yen has surged as much as 5% over the last three trading sessions, with Japan confirming coordinated yen-buying intervention on Friday with the U.S. in a rare move.

Lee Hardman, senior currency analyst at MUFG, said that while joint intervention may provide short-term support for the yen, it can only buy time and will not lead to a sustainable reversal of the yen's weakening trend without a change in fundamentals.