The vigilance around Middle East situation has eased, but the dollar/yen remains firm.

【6/4Market Overview

Tokyo time, USD/JPY briefly reached a high of160.07yen, but after the U.S. State Department announced a statement that “Israel and Lebanon have agreed to fully implement a ceasefire agreement,” the USD/JPY fell to159.81yen. Thereafter, some buying to around160.00yen occurred, but in the afternoon, reports that the Bank of Japan would “consider a rate hike at the June meeting and a possibility of further rate hikes within the year” were conveyed, sending it down to6yen159-range to rapidly rebound. In European time, reports regarding a ceasefire agreement between Israel and Lebanon caused crude oil futures to drop, and U.S. 10-year yields fell, leading to broad dollar selling, pushing USD/JPY down to159.74yen. NYtime, cross-yen pairs such as euro/yen rose. As U.S. 10-year yields fell and the decline narrowed, dollar buying resumed, with USD/JPY rising to around160.04yen near the close.

【6/5Market View