Yen Tumbles as US Imposes Sanctions on Iran, Rate Hike Expectations Rise
The Japanese yen has been under pressure in Asian trading on Tuesday after Washington imposed sanctions on Iran. The US dollar rose 0.2% against the yen to ¥159.39, extending its gains for a second consecutive day as investors sought safe-haven buying of the US currency.
The renewed military confrontation between the United States and Iran has raised concerns over global economic instability. The US Treasury imposed sanctions on nearly 60 Iran-linked entities, individuals, and vessels spanning various sectors, including nuclear, missile, cybersecurity, and oil.
Market pricing for a 25-basis-point interest rate hike by the Bank of Japan at its September meeting remains around 80%. Investors are awaiting further data on inflation, unemployment, and wages in Japan to reassess those expectations. The Japanese yen is expected to remain under negative pressure against the US dollar.