On Thursday, the USD/JPY pair was struggling to maintain slight gains amid a weaker US dollar, trading below the key round level of 159.00.

The US Dollar Index (DXY), which tracks the dollar against a basket of other currencies, is hovering near its lowest level since early March. This comes amid positive expectations of a sustainable peace agreement between the US and Iran, contributing to optimistic market sentiment. Moreover, US President Donald Trump has expressed the view that the conflict with Iran is nearing its end. These developments are putting downward pressure on the dollar, which in turn weighs on the USD/JPY pair.

Meanwhile, hopes for a diplomatic resolution are preventing significant fluctuations in oil prices, keeping them near a three-week low reached the previous day. This, in turn, eases inflation concerns, reduces expectations of aggressive Federal Reserve policy, and further pressures the dollar.

The Japanese yen, on the other hand, is receiving some support from speculation about possible intervention by authorities to counter the weakening of the national currency, which also contributes to a decline in USD/JPY.

However, economic concerns related to instability in the Strait of Hormuz may limit significant strengthening of the yen. Japan is heavily dependent on energy imports from the region, and a blockade initiated by the US Navy restricting shipping to and from Iran could further complicate already strained oil supplies. This raises concerns about Japan's short-term economic resilience, which may restrain yen gains and support USD/JPY levels.

From a broader perspective, spot prices have fluctuated within a familiar range over the past month. This suggests the need for sustained selling before traders begin adjusting to recent corrections around the 160.00 level, which represents the highest level since July 2025 and was reached last month. Oscillators remain positive, but bulls have not yet broken above the 20-day SMA; only after that will they gain a stronger advantage. At the same time, it is worth noting that all key moving averages are trending upward, indicating a positive overall bias for the pair.

In the absence of significant US macroeconomic data capable of influencing the market, speeches by key members of the FOMC may provide additional momentum for the dollar and the USD/JPY pair.

The table below shows the percentage change of the Japanese yen against major currencies today. The yen has shown the strongest gains against the US dollar.