The USD-JPY exchange rate declined 0.06% to 162.422 yen as of 2:01 PM on July 9 in Tokyo trading, according to Yonhap Infomax. The rate initially rose following escalated US-Iran tensions, as President Donald Trump stated the ceasefire based on a memorandum of understanding was 'over' and the US Central Command announced additional strikes against Iran on the 8th (local time). However, the rate reversed course after June FOMC minutes were interpreted as less hawkish than expected, with only some participants suggesting rate hikes were permissible rather than a majority view, while moderated oil price gains in Asian markets reduced yen selling pressure.
Trump Announces End to Iran Ceasefire, US Central Command Launches Additional Strikes
Donald Trump stated on the 8th (local time) that he believed the ceasefire with Iran based on a memorandum of understanding was 'over', signaling attacks against Iran. The US Central Command announced the same day via X (formerly Twitter) that 'additional strikes against Iran have been initiated following the commander-in-chief's directive'. Market participants assessed that it became difficult to gauge when navigation through the Strait of Hormuz would normalize. Dollar buying flowed in during early trading as US-Iran conflict reignited overnight, causing the rate to rise briefly.
June FOMC Minutes Show Divided Views on Rate Hikes
The June Federal Open Market Committee (FOMC) minutes were interpreted as less hawkish (favoring monetary tightening) than expected, applying downward pressure on the dollar. Some attendees expressed opinions that raising rates would be acceptable, but rate hike opinions were not the majority. Even those who voiced rate hike opinions did not oppose the rate freeze itself at the previous meeting. The USD-JPY rate declined shortly after the initial rise and remained mostly in negative territory, though volatility itself was not large.
WTI Crude Gains Moderate from 2% to 1% in Asian Trading
West Texas Intermediate (WTI) crude futures prices rose over 2% at one point in Asian markets before partially giving back gains to the 1% range during Tokyo trading hours. The moderation in oil price increases slowed yen selling momentum, as concerns about Japan's expanding trade deficit were partially alleviated, supporting yen strength.
Meanwhile, the EUR-JPY rate rose 0.01% from the previous session to 185.60 yen, the EUR-USD rate increased 0.09% to 1.14265 dollars, and the Dollar Index fell 0.09% to 100.961.
FAQ
What caused the USD-JPY rate to decline on July 9?
The USD-JPY rate fell 0.06% to 162.422 yen as of 2:01 PM on July 9, driven by less hawkish interpretation of June FOMC minutes showing divided views on rate hikes rather than majority support, and moderated WTI crude oil gains in Asian trading that reduced yen selling pressure.
What did Trump announce regarding the US-Iran ceasefire?
Donald Trump stated on the 8th (local time) that he believed the ceasefire with Iran based on a memorandum of understanding was 'over', and the US Central Command announced additional strikes against Iran were initiated following the commander-in-chief's directive the same day.
How did oil prices move during Tokyo trading hours on July 9?
West Texas Intermediate (WTI) crude futures prices rose over 2% at one point in Asian markets before partially giving back gains to the 1% range during Tokyo trading hours, with the moderation supporting yen strength by alleviating concerns about Japan's trade deficit expansion.
