Dollar yen is swung by oil prices, but continues to rise for a sixth day.

【5/18Market Overview

In Tokyo time, USD/JPY paused lower in the early hours158.57to around 158.57 yen, but later, aided by higher crude oil futures prices in after-hours trading, expectations of dollar buying ahead of the fix, and reports that “the government is considering issuing deficit government bonds as a source of financing for an expansionary budget,” which pressured the yen,159.07rising toward 159.07 yen. However, it then struggled due to vigilance against the possibility of intervention by Japanese currency authorities.

During European hours, USD/JPY retraced gains. As the US10year Treasury yields narrowed their rise, the dollar weakened against European currencies, and USD/JPY drifted in the upper 157s to lower 158s.NYTime, Iran’s semi-official Tasnim News Agency reported that “the United States will temporarily exempt Iranian oil from sanctions until a final agreement is reached,” causing crude prices to fall, and USD/JPY dropped to158.61yen. However, US officials denied the report, and Axios later reported that “the revised proposal from Iran is deemed insufficient for an agreement by the White House,” causing crude prices to rebound. As US10year Treasury yields rose again, USD/JPY rose to159.08yen.

【5/19Market View