Why hasn't the Japanese Yen been bought amid the tense situation in the Middle East?

As tensions in the Middle East escalate, the yen is depreciating further. Concerns over rising crude oil prices leading to a widening trade deficit in Japan have caused the once common phenomenon of “buying yen during crises” to disappear. Market focus is on the “2022-style yen depreciation” triggered by Russia’s invasion of Ukraine. Increasingly, opinions suggest that buying dollars and rising energy prices during extraordinary times will accelerate the selling of the yen.

“With concerns about oil prices rising due to the blockade of the Strait of Hormuz, there is no active atmosphere for buying yen,” explained a foreign exchange broker at a domestic Japanese bank about the market sentiment after early this week.

On March 3, in the London foreign exchange market, the yen against the dollar briefly depreciated to around 157.90 yen per dollar, the lowest level since February 9. It closed last weekend near 156 yen. The yen against the Swiss franc also depreciated to a low of about 203 yen per Swiss franc on the 2nd, and on the 3rd, it fell to a 1990s low against the Australian dollar.

Continue reading here to access Nikkei Chinese Online

Japan Economic News Agency and the Financial Times merged into the same media group in November 2015. The alliance formed by the two newspapers, founded in the 19th century in Japan and the UK, respectively, is promoting broad collaboration in areas such as special features under the banner of “high-quality, most powerful economic journalism.” As part of this effort, articles are exchanged between the two newspapers’ Chinese websites.