Following coverage of the Middle East situation, the dollar/yen rebounded to the 158 yen level.

【3/10Market Overview

Tokyo time, USD/JPY5・10Day (Go-to Day) approached by dollar buying at the Tokyo fix, reaching157.95yen, but later, as WTI crude oil futures fell sharply to the mid-$80s, selling intensified. The pair briefly breached the previous day’s low157.64yen to157.53yen. In European time, sparked by former President Trump’s remarks the previous day, expectations grew that US and Israel’s attack on Iran would end soon, triggering a reversal of the recent “safe-haven dollar buying,” with USD/JPY sliding to as low as157.27yen. Also, Defense Secretary Hagel’s comment that military action against Iran would continue until the enemy is “completely and decisively defeated” and that “on the 10th we will carry out the largest airstrikes against Iran to date” spurred renewed dollar buying, and USD/JPY rose to157.97yen. In NY time, at the G7 (Group of Seven) energy ministers’ meeting, discussions on market-stabilizing measures such as coordinated oil stock releases produced a joint statement that “we are prepared to take necessary measures including oil stock releases.” Oil price declines followed on the expectation of stock releases. When US Energy Secretary Light tweeted that “the US Navy has successfully escorted oil tankers through the Straits of Hormuz,”WTIcrude futures briefly fell to1barrel =76.73dollars, a19% drop from the previous day, sending USD/JPY down to157.39yen. However, after Light deleted the article and the White House stated there was no tanker escort, crude futures reversed and rose to around87dollars, and some reports that the intel agencies had detected signs that Iran was preparing to lay mines in the Hormuz Strait propelled USD/JPY back up to158.13yen.

【3/11Market View