- USD/JPY holds steady around 159.60 in Friday’s early Asian session.
- Persistent tensions in the Middle East underpin the US Dollar, but US tariff threats might cap its upside.
- BoJ authorities warned that they may adjust policy if Yen weakness persists.
The USD/JPY pair trades on a flat note near 159.60 during the Asian trading hours on Friday. Trading volumes are likely to be thin due to the Good Friday holiday. All eyes will be on the US March Nonfarm Payrolls (NFP) report, which will be published later on Friday.
Heightened geopolitical tensions in the Middle East drive up oil prices and lift the US Dollar (USD) against the Japanese Yen (JPY). US President Donald Trump pressures Iran to make a deal after a military strike destroys a bridge near Tehran. Meanwhile, Iran’s foreign minister, Abbas Araghchi, stated that Washington’s recent strikes on civilian infrastructure will not force the country to back down, adding that such actions “convey the defeat and moral collapse of an enemy in disarray.”
On the other hand, chaos around U.S. tariff policy might cap the upside for the Greenback. The Trump administration plans to slap up to 100% on certain imported medicines from companies that don’t reach deals with his administration in the coming months, per Bloomberg. A White House statement said that the new levy applies to patented drugs made in countries that lack tariff deals with the US by companies that don’t have most-favored-nation-pricing agreements with the administration.
Fears that Japanese authorities would step in to support the domestic currency could support the JPY and act as a headwind for the pair. Japan’s top currency diplomat, Atsushi Mimura, said on Monday that officials may need to take “decisive” steps if speculative moves persist in the currency market.
