USD/JPY holds onto light gain as Hormuz closure fuels safe-haven demand

💡 DMK Insight

The USD/JPY’s neutral stance at 159.70 reflects traders’ uncertainty amid rising geopolitical tensions. With the US taking steps to restrict traffic through the Strait of Hormuz, we could see volatility spike in both forex and oil markets. Historically, such geopolitical escalations often lead to safe-haven flows into the yen, which could push USD/JPY lower if tensions persist. Traders should keep an eye on the 159.50 support level; a break below could signal a deeper correction. Conversely, if the pair holds above this level, it might indicate resilience despite the geopolitical backdrop. Watch for any further developments in the Strait, as they could influence not just USD/JPY but also oil prices, which are closely tied to this region. A surge in oil could lead to inflationary pressures, impacting the broader market sentiment toward the dollar. In the coming days, monitor the 160.00 resistance level closely; a breakout could suggest a return to bullish sentiment for the USD against the JPY, especially if economic data supports the dollar’s strength.