Yen holds near 157 amid volatile sentiment

The Japanese yen traded near 157 per dollar on Thursday, edging slightly weaker as global risk sentiment remained fragile. The US dollar strengthened in the following session, with the dollar index climbing back above 99 on easing inflation concerns and hopes that commercial activity in the Gulf will remain intact. Despite this, markets stayed cautious as the US-Israeli conflict with Iran entered its sixth day, raising fears of further escalation and longer-term inflation and growth risks. In Japan, Bank of Japan Governor Kazuo Ueda warned that the Middle East situation could materially impact the economy, reinforcing expectations that interest rates will stay on hold for an extended period.

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