Japanese Yen declines toward 19-month low against USD amid boiling oil prices

The Japanese Yen is under pressure against its major peers amid rising oil prices and a risk-off mood.
Japan PM Takaichi said that households suffer due to rising gas prices.
Higher oil prices and dismal market sentiment have improved the US Dollar’s demand.

Sagar Dua FXStreet

The Japanese Yen (JPY) underperforms against its major currency peers, except the Euro (EUR) and the Pound Sterling (GBP), is down 0.4% to near 158.50 during the early European trading session on Monday. The USD/JPY pair seems to be approaching the 19-month high of 159.45 as soaring oil prices due to the war in the Middle East, which involves the United States (US), Israel, and Iran, have dampened the JPY appeal.

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.37%	0.45%	0.35%	-0.25%	0.17%	0.18%	0.29%
EUR	-0.37%		0.07%	-0.04%	-0.62%	-0.20%	-0.18%	-0.08%
GBP	-0.45%	-0.07%		-0.11%	-0.70%	-0.27%	-0.27%	-0.15%
JPY	-0.35%	0.04%	0.11%		-0.59%	-0.16%	-0.16%	-0.04%
CAD	0.25%	0.62%	0.70%	0.59%		0.43%	0.43%	0.55%
AUD	-0.17%	0.20%	0.27%	0.16%	-0.43%		0.00%	0.12%
NZD	-0.18%	0.18%	0.27%	0.16%	-0.43%	-0.00%		0.12%
CHF	-0.29%	0.08%	0.15%	0.04%	-0.55%	-0.12%	-0.12%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

WTI Oil price has surrendered some of its early gains that were driven by air strikes from the US and Israel on Iranian depots over the weekend, but is still 15% higher at around $101.00. The oil price corrects from its intraday high of around $113.00 after reports stated that G7 members and the International Energy Agency (IEA) will discuss the release of emergency oil reserves.

Surging oil prices are unfavorable for currencies like the JPY, given that Japan is one of the largest importers of oil in the world.

Earlier in the day, Japan's Prime Minister (PM) Sanae Takaichi said that residents are worried about “rising gasoline prices”, and the government is exploring what steps it can take to offset the same. However, Takaichi said that it is “difficult to say now how the Middle East conflict might affect Japan's economy”.

On the macroeconomic front, investors will focus on revised Q4 Gross Domestic Product (GDP) data, which will be released on Tuesday. Revised estimates are expected to show that the Japanese economy expanded at a faster pace of 0.3% against the preliminary reading of 0.1%.

Meanwhile, the US Dollar trades firmly amid rising oil prices and a risk-off market mood. As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.45% higher to near 99.35.

This week, the US Dollar will be influenced by the US Consumer Price Index (CPI) data for February, which will be released on Wednesday.

Economic Indicator

Gross Domestic Product (QoQ)

The Gross Domestic Product (GDP), released by Japan’s Cabinet Office on a quarterly basis, is a measure of the total value of all goods and services produced in Japan during a given period. The GDP is considered as the main measure of Japan’s economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.

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Week ahead: Fed, BoJ and BoE decide amid inflation dilemma

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CFTC Report: Japanese Yen reversal leads a broader positioning reset

The week in one sentence: Yen positioning swung back into net longs in the week to September 8, leading to a 103.0K-contract improvement. Canadian Dollar shorts also fell sharply, while Oil buying accompanied another price rise. Euro, Sterling and Swiss Franc positioning weakened despite firmer currencies, leaving those moves unconfirmed by speculative flows.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.