USD/JPY Price Forecast: Dollar ticks up to 159.00 as Iran’s peace talks wobble

USD/JPY edges up for the second consecutive day to reach session highs past 159.00.
Fresh US attacks on Irtan have triggered a moderate risk-off reaction.
BoJ's Himino says that the bank should consider developments in Iran to decide its monetary policy.

Guillermo Alcala FXStreet

The US Dollar (USD) appreciates against the Japanese Yen (JPY) for the second consecutive day on Tuesday, hitting session highs above 159.00 at the time of writing, as fresh US attacks on Iran put the peace process into question. The pair, however, remains within previous ranges, below last week’s high, at 159.35.

Markets have reacted with caution to news about attacks targeting missile sites and boats in southern Iran, which have been considered defensive by US authorities. Investors, nevertheless, remain hopeful of a peace deal, which is keeping the safe-haven US Dollar from rallying higher.

In Japan, Bank of Japan (BoJ) Deputy Governor Ryozo Himino said earlier on Tuesday that the bank should take into account the developments and the economic consequences of the Middle East conflict to consider the timing and pace of future interest rate hikes. The bank kept its monetary policy unchanged at its latest meeting in April, with three committee members calling for a hike, which has boosted hopes of a tightening move at June’s meeting.

Technical Analysis: US Dollar holds a neutral-to-positive tone

USD/JPY trades at 159.02, having regained about two-thirds of the ground lost after an alleged intervention on April 30. Momentum indicators are neutral-to-bullish. The Relative Strength Index (RSI) is starting to slope up above the key 50 level. The Moving Average Convergence Divergence (MACD) is still slightly negative, although drawing close to the zero level.

Bulls are likely to find significant resistance at the May 21 high in the mentioned 159.35 area, ahead of the 160.00 level, considered an intervention trigger for Tokyo authorities. Beyond here, the April 30 high, at 160.73, would come into focus.

On the downside, initial support emerges at the 158.65-158.75 area, which held the pair last week. A bearish reaction below here would lure bears into the previous resistance area, around 158.00 ahead of the May 14 low, at the 157.30 area.

(The technical analysis of this story was written with the help of an AI tool.)

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.