The Japanese yen rose in Asian trading on Monday against a basket of major and minor currencies, extending its gains for a second consecutive day against the US dollar, benefiting from a slowdown in the US currency following an Axios report that Iran had submitted a new peace proposal to the United States.
The Japanese currency's move into positive territory comes ahead of the Bank of Japan's monetary policy meeting later today, where interest rates are expected to remain unchanged for the third consecutive meeting.
Price overview
Today's Japanese Yen exchange rate: The dollar fell against the yen by about 0.1% to (159.20¥), from today's opening price of (159.30¥), and recorded a high of (159.60¥).
The yen ended Friday's trading session up 0.2% against the dollar, its first gain in the last five days, as it recovered from a near two-week low of 159.85 yen.
The yen lost about 0.5% against the dollar last week, its first weekly loss in a month, due to escalating tensions between the United States and Iran.
US dollar
The dollar index fell 0.1% on Monday, extending its losses for the second consecutive session and moving away from its highest level in nearly two weeks, reflecting the continued slowdown in the US currency against a basket of global currencies.
The decline in the US dollar comes amid improved risk sentiment and a slowdown in demand for the currency as the best alternative investment, especially after an Axios report on Iran presenting a new peace proposal to the United States.
According to Axios, citing sources, Iran has presented the United States, through Pakistani intermediaries, with a new proposal to reopen the Strait of Hormuz and end the war, while postponing nuclear negotiations to a later stage.
Bank of Japan
The Bank of Japan’s third monetary policy meeting of 2026 kicks off later today, with decisions expected tomorrow, Tuesday. Japanese interest rates are expected to remain unchanged for the third consecutive meeting.
The bank will discuss the latest economic developments in the world’s fourth largest economy, amid market anticipation of its direction on interest rates and yield curve control in light of new global variables, especially those related to the repercussions of the Iranian war and rising energy prices.
Reuters reported that the Bank of Japan is likely to refrain from raising interest rates at this meeting, as the diminishing prospects for an end to the Middle East war in the near term maintain high uncertainty about the country's economic and price outlook.
Japanese interest rate
The central bank governor, Kazuo Ueda, recently refrained from pledging to raise interest rates in April, given the impact of the war on economic prospects.
The pricing of the probability of the Bank of Japan raising interest rates by a quarter of a percentage point at this week's meeting is steady at 10%, while the pricing of the probability of a quarter-point increase at the June meeting is steady at 35%.
