The Japanese yen pared some of its gains against the dollar after a sharp surge earlier on Monday, which further fueled ongoing speculation that the Japanese government may have intervened to support the declining currency.

By 04:32 ET (08:32 GMT), the yen was up 0.1% against the dollar at 156.92, retreating slightly from a peak of 155.69. Most of these gains occurred during a brief window around midday Singapore time (04:00 GMT). Market holidays in Japan and China contributed to lower trading volumes.

Last week, the yen jumped approximately 1.5% against the dollar, recording its largest weekly gain since February.

Market participants widely believe that authorities in Tokyo intervened in currency markets last Thursday to keep the USD/JPY pair below the 160 level this year.

Barclays analysts noted: "With Japan entering the Golden Week holiday until next Wednesday, liquidity is likely to be thin and price movements more prone to one-way trends, so authorities may have sought to correct the level before this period."

According to sources cited by Reuters, Japanese authorities have already engaged in yen-buying operations for the first time in two years, although the Ministry of Finance did not immediately confirm the report. Reuters added that money market data from Friday suggests Tokyo may have spent up to 5.48 trillion yen ($35 billion) on currency purchases last week.

BCA Research analysts stated in a note: "Intervention can limit further yen weakness, but it does not necessarily create a sustained rally because macro factors continue to work against the currency." They pointed to high oil prices, the Federal Reserve's stance on interest rates, and low real interest rates in Japan as headwinds, alongside low implied volatility supporting yen-funded carry trades.

Dollar sees limited gains amid geopolitical tension

Parallel to the yen's movements, traders are closely monitoring developments in the conflict with Iran. Over the weekend, President Donald Trump announced a new initiative to assist ships stranded in the Strait of Hormuz, though specific details were sparse.

On Monday, joint maritime information centers reported that the U.S. established an "enhanced security zone" south of standard shipping lanes. Vessels were instructed to coordinate closely with Omani officials due to anticipated high traffic density, according to the Associated Press.

The U.S. Dollar Index, which measures the greenback against a basket of currencies, rose 0.1% to 98.22. The Euro remained largely stable at $1.1722, while the British Pound fell 0.1% to $1.3563. The German Economy Ministry stated it is in contact with Washington following Trump's warning on Friday regarding a potential 25% tariff hike on European cars and trucks.

Meanwhile, British markets were closed on Monday for a public holiday. The Australian dollar—often viewed as a proxy for risk appetite—fell 0.1% ahead of a key interest rate decision from the Reserve Bank of Australia this week, amid concerns about the war's impact on domestic inflationary pressures.

Silver prices fell by more than 4% in the European market on Monday, retreating from a one-week high and on track for their first loss in three days. This decline is driven by profit-taking and correction activities, coupled with pressure from rising global oil prices.

This comes as tensions escalate between the United States and Iran in the Strait of Hormuz, with Iranian media reporting a missile attack on a U.S. warship, while a U.S. official has denied the reports.

Price Overview

* Silver Prices Today: Silver fell by 4.15% to ($72.22), from an opening level of ($75.35), recording a session high of ($75.99).

* At Friday's close, silver prices rose 2.15%, marking the second consecutive daily gain and reaching a one-week high of $76.98 per ounce, supported by a dip in global oil prices at the time.

* Last week, silver lost approximately 0.5%, its second consecutive weekly decline.

Global Oil Prices

Oil prices rose by approximately 4% in global markets on Monday, resuming their ascent near multi-week highs amid fears of escalating U.S.-Iran tensions in the Strait of Hormuz.

According to Iran's Fars News Agency, two missiles struck a U.S. warship near Jask Island after it allegedly ignored Iranian warnings. Conversely, Axios reported that a U.S. official denied any American vessel was targeted by a missile attack.

U.S. President Donald Trump stated that Washington would begin efforts Monday morning to release ships stranded in the Strait of Hormuz as a humanitarian gesture to assist neutral nations. Meanwhile, Iranian state media reported that the U.S. conveyed its response to a 14-point Iranian proposal through Pakistan. Tehran is seeking an end to the U.S. blockade and a delay in nuclear negotiations, while Washington maintains that a nuclear deal is the priority.

The rise in global oil prices is renewing fears of accelerating inflation, which could push global central banks to raise interest rates in the near term—a sharp reversal from pre-war expectations of rate cuts or prolonged pauses.

U.S. Interest Rates

* Minneapolis Fed President Neel Kashkari stated that the longer the war with Iran continues, the higher the risks of inflation and economic damage, limiting the central bank’s ability to provide clear interest rate guidance.

* Chicago Fed President Austan Goolsbee noted on Saturday that following "bad" recent price data, caution must be exercised regarding rate cuts until inflation trends downward.

* According to the CME FedWatch Tool: Market pricing for the probability of keeping U.S. interest rates unchanged in June stands at 95%, with a 5% probability of a 25-basis-point cut.

* Investors are closely monitoring upcoming U.S. economic data and comments from Federal Reserve officials to refine these expectations.

Gold prices declined in the European market on Monday, continuing their losses for the second consecutive day under pressure from rising global oil prices, which are fueling inflation concerns and expectations of higher interest rates.

This comes amid anticipation of updates regarding peace negotiations between the United States and Iran, especially as the market awaits Iran's stance following the U.S. response to an Iranian proposal delivered via Pakistani mediators.

Price Overview

* Gold Prices Today: Gold prices fell by 0.9% to ($4,573.85), from an opening level of ($4,614.10), recording a session high of ($4,629.43).

* At Friday's close, gold prices lost 0.2%, marking the fourth loss in five days due to rising global oil prices.

* Last week, gold prices lost more than 2%, marking the second consecutive weekly loss due to inflation fears and the potential for global interest rate hikes.

Global Oil Prices

Oil prices rose in global markets on Monday by more than 1%, resuming their ascent near multi-week highs amid fears of escalating tensions between the United States and Iran over the Strait of Hormuz.

U.S. President Donald Trump stated that Washington would begin efforts Monday morning to release ships stranded in the Strait of Hormuz as a humanitarian gesture to assist neutral nations in the U.S.-Israeli war with Iran.

Official Iranian media reported that the United States conveyed its response to a 14-point Iranian proposal through Pakistan. Tehran seeks an end to the U.S. blockade and a postponement of nuclear negotiations, while Washington insists on making a nuclear deal the priority.

The Federal Reserve and U.S. Interest Rates

* The Federal Reserve kept interest rates unchanged last week for the third consecutive meeting.

* The FOMC voted 8 to 4 to maintain the benchmark federal funds rate in the 3.50% to 3.75% range, the lowest level since September 2022.

* The vote saw the largest dissent within the Federal Reserve since 1992, as some members no longer see a need for the U.S. central bank to lean toward monetary easing.

* Fed Chair Jerome Powell admitted that the conflict in the Middle East has created "new inflationary pressures" that were not previously accounted for.

* Minneapolis Fed President Neel Kashkari stated that the longer the war with Iran continues, the greater the risks of high inflation and economic damage, limiting the central bank's ability to provide guidance on interest rate policy at this time.

* Chicago Fed President Austan Goolsbee said on Saturday, following "bad" recent price data, that caution must be exercised regarding interest rate cuts until inflation begins to decline.

* According to the CME FedWatch Tool: Market pricing for the probability of keeping U.S. interest rates unchanged in June stood at 95%, with a 5% probability of a 25-basis-point cut.

* To refine these probabilities, investors are closely monitoring upcoming U.S. economic data and comments from Federal Reserve officials.

Gold Performance Forecast

Tim Waterer, chief market analyst at KCM Trade, said: "Gold is still suffering from the residual effects of the Federal Reserve's hawkish statements last week, particularly the prominent dissenting votes against further monetary easing."

Waterer added: "We expect gold to trade in a range between $4,400 and $5,500 by the end of the year. Reaching the upper end of this range would require a sustained de-escalation of tensions in the Middle East and a cooling of inflationary pressures, while persistently high oil prices will keep the metal in the lower half of the range."

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged on Friday. The total stays at 1,035.77 metric tons, the lowest level since October 16, 2025.

The Euro rose in the European market on Monday against a basket of global currencies, resuming gains that briefly paused on Friday against the U.S. dollar. The currency is approaching a multi-week high, benefiting from a slowdown in the greenback as investors assess developments in peace talks between the United States and Iran.

ECB President Christine Lagarde stated last week that the option of raising interest rates was discussed extensively during the recent meeting, noting that the upcoming meeting in June will be the "appropriate time" to re-evaluate the path of monetary policy.

Price Overview

* Euro Exchange Rate Today: The Euro rose against the dollar by approximately 0.25% to ($1.1747), up from Friday's closing price of ($1.1719), recording a session low of ($1.1720).

* The Euro ended Friday's trading down 0.1% against the dollar due to correction and profit-taking, after having reached a near two-week high of $1.1785 earlier in the session.

The U.S. Dollar

The dollar index fell by more than 0.2% on Monday, resuming losses that paused on Friday. This decline reflects a retreat in the U.S. currency against a basket of major and minor currencies.

The decline comes as safe-haven demand for the dollar slows while markets evaluate recent intensive talks between the U.S. and Iran. Official Iranian media reported that the U.S. conveyed its response to a 14-point Iranian proposal through Pakistan. Tehran seeks an end to the U.S. blockade and a postponement of nuclear negotiations, while Washington remains insistent on prioritizing a nuclear deal.

President Donald Trump stated that Washington would begin efforts Monday morning to release ships stranded in the Strait of Hormuz as a humanitarian gesture to assist neutral nations affected by the U.S.-Israeli war with Iran.

European Interest Rates

* In line with expectations, the ECB kept its key interest rates unchanged last week at 2.15%—the lowest level since October 2022—marking the seventh consecutive meeting without a change.

* President Lagarde noted that the Governing Council reached a unanimous decision to hold, despite a lengthy discussion regarding the "option to hike," and confirmed that June will be the "appropriate time" to reassess monetary policy.

* Following the meeting, money market pricing for a 25-basis-point rate hike by the ECB in June rose from 35% to 55%.

* Investors are now awaiting further Eurozone economic data regarding inflation, unemployment, and wages to further refine these interest rate expectations.