Middle East conflict raises bar for Japan yen intervention

Japan faces a higher bar for yen intervention as Middle East conflict drives dollar demand. Officials may consider rate hikes to support the currency.

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Japan faces a significantly higher bar for currency market intervention as geopolitical tensions in the Middle East push the yen toward the 160-per-dollar threshold. Analysts suggest that a lack of aggressive verbal intervention from officials could see the currency slide as low as 165 to the dollar, further escalating import costs and inflation as the conflict involving Iran drives up global crude oil prices.

A close-up illustration of Japanese yen banknotes, captured in September 2022. REUTERS/Florence Lo/Illustration/File Photo
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