15.05.202602:38:13UTC+00Yen Heads for Steep Weekly Decline

The Japanese yen weakened to around 158.5 per dollar on Friday and was on track for a weekly loss of more than 1%, pressured by broad dollar strength as faster US inflation linked to the Iran war reinforced expectations of a Federal Reserve rate hike later this year. Persistently elevated oil prices, driven by the prolonged Middle East conflict, also weighed on the yen, given Japan’s heavy dependence on energy imports from the region. The currency has now given back roughly half of the gains triggered by multiple rounds of government intervention that began on April 30, stoking speculation that Tokyo may step into the market again to shore up the yen. US Treasury Secretary Scott Bessent also expressed support for Japan’s recent actions aimed at stabilizing the currency. Meanwhile, Bank of Japan board member Kazuyuki Masu argued that interest rates should be raised as soon as possible, citing increasingly persistent inflation risks stemming from the Iran war.