Dollar rises on Iran war as BOJ holds rates steady
The dollar rose Tuesday as Iran war risks offset a brief yen rally after a split BOJ vote. Markets now await the Fed meeting and a shift in central bank leadership.
The United States dollar index rose 0.2% to 98.66 on Tuesday as conflict in Iran drove investors toward safe-haven assets. The move snapped a two-day losing streak despite a brief yen rally following a divided Bank of Japan vote. Rising energy costs and geopolitical instability are shifting expectations for global interest rate cuts through the second quarter.
The Bank of Japan (BOJ) kept its policy rate at 0.75%, but three board members voted for an increase to 1.0%. USD/JPY traded at 159.65 after Governor Kazuo Ueda issued a cautious growth outlook. Japan board members Junko Nakagawa, Hajime Takata, and Naoki Tamura cited inflation risks from energy supply disruptions.
