USD/JPY: Dollar Leaps 1% Against Yen as Forex Markets Reshuffle After US Strikes Iran

US currency was well bid Monday morning following weekend warfare where the US bombed out three Iranian nuclear sites.

📈 What’s the Dollar Doing?

• The USDJPY advanced 1% to kickstart this week’s trading after an eventful weekend spurred a wave of bidding for the US dollar. Three major nuclear sites in Iran were bombed on Saturday by the US in what shaped up to be a direct involvement of Washington into the war between Iran and Israel.
• The heightened uncertainty prompted forex traders to seek the safety of the greenback while other currencies dipped. The dollar-yen pair soared to a session high of ¥147.60 from an opening of ¥146.67.
• On its way up, the exchange rate crossed the 100-day moving average, indicating that the trend is picking up speed in the mid-term. The 200-day line is already behind and the short-term 50-day line awaits at ¥149.47.

📢 What’s News?

• It’s crunch time now for the geopolitical situation as markets everywhere await Iran’s response. Stock futures were surprisingly steady Monday morning and Bitcoin prices were optimistically rising after a weekend dip as if markets were positioning for good news.
• In his first comments after the US strike, Iran’s Supreme Leader Ali Khamenei wrote on X, "The punishment continues. The Zionist enemy has made a big mistake, committed a big crime; it must be punished and it is being punished; it is being punished right now."
• Donald Trump addressed the nation late on Sunday, signaling that the US stands ready to take it further if necessary. “There will be either peace, or there will be tragedy for Iran far greater than we have witnessed over the last eight days,” he said.

👀 What’s Next?

• The dollar’s strengthening was seen also against the euro — the EURUSD pair was lower by a modest 0.2% to trade near $1.1490. The GBPUSD was just about flat at $1.3435 as forex speculators were largely in wait-and-see mode rather than flat-out panic selling.
• What’s next? While Iran weighs its options before its response, markets keep trucking in their usual tracks. Next on the economic calendar is Federal Reserve boss Jay Powell’s address to the Senate. Tuesday and Wednesday, he’ll be fielding questions on the interest rate path, the economy, and the way forward.
• In other big news and events, the markets will be watching for the consumer confidence readout on Tuesday, the quarterly report on GDP growth on Wednesday, and the Fed’s favorite inflation measure, PCE, on Friday.