The Japanese yen weakened in Asian trading on Monday against a basket of major and minor currencies, moving into negative territory against the US dollar and approaching its lowest level in four weeks, as caution and uncertainty dominate global markets ahead of further developments in peace negotiations between the United States and Iran.

Investors are also awaiting the Bank of Japan’s policy meeting later this month, when policymakers will reassess monetary tools and decide on interest rates amid differing views within the policy board regarding the central bank’s next move.

Price Overview

• Japanese yen exchange rate today: The dollar rose about 0.2% against the yen to ¥159.50, from Friday’s closing level of ¥159.23, and recorded an intraday low of ¥159.30.

• The yen ended Friday’s trading virtually unchanged against the dollar after gaining 0.2% in the previous session as part of a recovery from a four-week low of ¥159.65.

• During May, the yen lost 1.7% against the US dollar, marking its third monthly decline in the past four months, largely due to higher US Treasury yields.

US dollar

The dollar index rose more than 0.1% on Monday as part of a recovery from a two-week low, reflecting renewed strength in the US currency against a basket of global currencies.

The advance comes amid cautious market sentiment and reduced risk-taking as investors await the outcome of ongoing negotiations between the United States and Iran regarding an end to the war and the reopening of the Strait of Hormuz, one of the world’s most critical energy trade routes.

Global oil prices

Oil prices jumped more than 2% on Monday, rebounding from five-week lows as Israel expanded its offensive in Lebanon, reducing hopes for a ceasefire in the Middle East.

Latest developments in the Iranian war

• The United States and Iran remain without an agreement to end the war after Trump stated that he is not in a hurry to finalize a deal.

• The US president returned the proposed agreement draft with Iran to include “stricter” conditions related to the nuclear file, extending negotiations for several additional days.

• Donald Trump said on Friday that he would make a decision soon regarding the proposed agreement to extend the ceasefire with Iran.

• The mechanism for releasing frozen Iranian assets abroad remains one of the most complex points of disagreement between Washington and Tehran.

• Iranian Foreign Minister Abbas Araghchi confirmed that messages continue to be exchanged with Washington, noting that the success of the talks will ultimately be judged by their final outcome and whether the rights of the Iranian people are preserved.

Japanese interest rates

• The Bank of Japan will meet on June 15-16 to assess monetary policy options appropriate for developments in the world’s fourth-largest economy.

• Market pricing for a quarter-point interest rate increase at the June meeting currently stands at around 60%.

• Markets are eagerly awaiting a speech by Bank of Japan Governor Kazuo Ueda on Wednesday for clues on whether the central bank intends to proceed with a rate hike in June.

• Investors are also awaiting additional data on inflation, unemployment, and wages in Japan to reassess those expectations.

The ¥160 threshold

Japanese authorities continue to closely monitor movements in the local currency, particularly as the yen weakens toward the critical ¥160-per-dollar level, which has long been viewed as a threshold that could trigger renewed intervention in the foreign exchange market.

Reuters sources previously reported that Tokyo intervened several times in late April and early May to halt the yen’s decline, although the currency’s recovery proved short-lived. At the time, the exchange rate reached ¥159.25 per dollar, its weakest level since April 30.

US President Donald Trump said Friday morning that he would meet in the “Situation Room” to make a “final decision” after outlining a set of conditions that Iran must accept before he approves an agreement to end the war.

It was not immediately clear from Trump’s statement on Truth Social which of his key demands had already been incorporated into the preliminary agreement currently being negotiated by US and Iranian officials to end the three-month conflict.

Trump demanded that Iran agree never to possess a nuclear weapon and that the Strait of Hormuz be “opened immediately” to shipping traffic without any restrictions or transit fees.

He also stated that the US naval blockade against Iran in the Gulf of Oman “will be lifted now,” although it was unclear whether he meant that this step would occur only if the previous conditions were met.

Trump added that the enriched material buried at sites targeted during last year’s attacks on Iran’s nuclear facilities “will be extracted” by the United States “in close coordination and cooperation with the Islamic Republic of Iran and the International Atomic Energy Agency,” before being destroyed.

He also said: “No funds will be exchanged until further notice,” adding that “other less important provisions have been agreed upon.”

Trump concluded by saying: “I am now heading to the Situation Room to make the final decision.”

Oil prices fell following Trump’s post.

Disagreements over the agreement’s text

The exact terms of the agreement remain unclear. Later on Friday, Iran’s Fars News Agency responded to Trump’s statement, saying it included issues that “contradict the provisions of the agreement text.”

The agency said in a Telegram post, citing informed sources, that there is no clause in the agreement requiring the strait to remain open without fees.

It also stated that the draft agreement contains no reference to Iran dismantling or destroying its nuclear materials.

Fars emphasized that “the most important part of the agreement” is the “immediate payment of $12 billion in frozen Iranian assets,” adding that Iran will reject any further negotiations unless that payment is made.

The White House did not immediately respond to CNBC’s request for comment regarding Trump’s remarks and the Fars response.

A White House official had confirmed on Thursday an Axios report stating that US and Iranian negotiators had reached a 60-day memorandum of understanding that would extend the current ceasefire and open the door to nuclear talks.

According to the report, the memorandum would also lift restrictions on navigation through the strait and require Iran to remove all mines from the waterway within 30 days in exchange for the United States lifting its blockade.

The issue of Iran’s highly enriched uranium stockpile and enrichment program would be a top priority during the 60-day period, according to the Axios report. The draft is also expected to pave the way for negotiations on sanctions relief and the release of frozen Iranian funds.

The status of the Strait of Hormuz

Trump’s recent signals suggesting progress toward a US-Iran peace agreement contrast with continued military and economic escalation between the two countries, as well as ongoing anti-American rhetoric from Iranian officials.

The Pentagon announced Thursday morning that Iran had launched a ballistic missile toward Kuwait and deployed attack drones in and around the Strait of Hormuz. Iranian media also reported late Thursday that Iranian armed forces launched missiles toward undisclosed targets.

The US Treasury Department announced new sanctions against Iran on Wednesday and Thursday, including measures targeting Tehran’s recent efforts to assert control over transit traffic through the strait.

In posts on X before Trump’s Friday remarks, Iranian officials appeared defiant toward the United States, praising relations with neighboring Middle Eastern countries, including Oman, which has recently been the subject of Trump’s threats.

According to reports, Oman has been holding discussions with Iran regarding transit fees for ships passing through the Strait of Hormuz, the vital global oil shipping route where traffic has been severely disrupted by Iranian threats since the outbreak of the war.

During a Cabinet meeting on Wednesday, Trump said: “Oman will behave like everyone else, or we’ll have to bomb them.”

On Thursday, US Treasury Secretary Scott Bessent warned Oman that the United States would “aggressively target” any party involved in “facilitating the imposition of fees” on passage through the strait.

In a translated post on X attributed to Iranian Parliament Speaker Mohammad Bagher Ghalibaf on Friday morning, a vague but sharply worded description of the negotiations was offered.

The account wrote: “We extract concessions not through dialogue but through missiles; negotiations merely make them understand that.”

It added: “We do not trust guarantees or words. Actions alone are the standard. No step will be taken before the other side moves.”

The statement continued: “The winner of any agreement is the side most prepared for war the next day.”

Meanwhile, Iranian Foreign Minister Abbas Araghchi said he had spoken with his Omani counterpart and “reaffirmed Iran’s solidarity with Oman in the face of any threat.”

Wall Street’s major indexes continued to hit fresh record highs on Friday, putting them on track for both weekly and monthly gains, as technology stocks advanced and investor optimism increased following reports that the United States and Iran had reached an agreement to extend the ceasefire.

The technology sector jumped 2.2%, supported by strong gains in semiconductor stocks.

Dell shares surged 34.7% after the company raised its annual revenue and profit forecasts on Thursday. Shares of Hewlett Packard Enterprise climbed 13.6%, while Super Micro Computer gained 17%.

Sources told Reuters that Washington and Tehran had agreed to extend the ceasefire and lift restrictions on navigation through the Strait of Hormuz, although US President Donald Trump has not yet given final approval.

All three major indexes reached new record highs during trading, driven by renewed enthusiasm for artificial intelligence and strong earnings growth, despite lingering concerns about the impact of the Iranian conflict on inflation and the global economy.

Bob Savage, Head of Macro Market Strategy at BNY, said:

“Markets are ending May with a clear risk-on tone, driven by enthusiasm around artificial intelligence, lower oil prices, and growing expectations that US-Iran tensions will remain under control under a ceasefire extension framework.”

Nine of the eleven major sectors within the S&P 500 declined. The communication services sector fell 1.2%, led by a 1.5% decline in Alphabet shares.

Meanwhile, the Philadelphia Semiconductor Index rose 1.7%, bringing its gains for the current quarter to more than 70%.

The software services index also advanced about 4%, erasing all of its losses since the end of January, when concerns over artificial intelligence-related disruptions weighed on the sector.

The S&P 500 is heading toward its ninth consecutive weekly gain, the longest winning streak since December 2023. The Dow Jones and Nasdaq are also expected to finish the week higher, with all three major indexes on track for a second consecutive month of gains.

As of 10:05 a.m. New York time, the Dow Jones Industrial Average had risen 151.04 points, or 0.30%, to 50,820.01. The S&P 500 gained 31.69 points, or 0.41%, to 7,594.98, while the Nasdaq Composite advanced 156.47 points, or 0.58%, to 27,073.94.

US economic data released on Thursday showed inflation recorded its fastest annual increase in three years during April, while first-quarter GDP growth was revised down to an annualized rate of 1.6%.

Savage added:

“At the same time, central banks remain focused on inflation risks. Officials at both the European Central Bank and the Federal Reserve have warned that supply shocks and rising inflation expectations could keep the possibility of further rate hikes on the table as growth indicators improve.”

Jeffrey Schmid, President of the Federal Reserve Bank of Kansas City, warned that the energy price shock may not be temporary, while Michelle Bowman, Vice Chair for Supervision at the Federal Reserve, said persistently elevated inflation could require tighter monetary policy.

Money markets currently expect the Federal Reserve to keep interest rates unchanged through the end of the year, with limited expectations for a 25-basis-point rate hike in December.

In other stock movements, Gap shares fell 17.7% after the apparel retailer lowered its annual sales forecast, while American Eagle Outfitters dropped 14.9% after maintaining its comparable annual sales outlook.

On the other hand, Okta shares jumped 21% after the digital identity company reported quarterly revenue that exceeded expectations.

Declining stocks outnumbered advancing issues by a ratio of 1.05-to-1 on the New York Stock Exchange and 1.03-to-1 on the Nasdaq.

The S&P 500 recorded around 20 new 52-week highs against six new lows, while the Nasdaq posted 76 new highs and 24 new lows.

Bitcoin may be struggling at the moment, but according to Anthony Pompliano, that could simply be part of a much larger market cycle.

Speaking in an interview on CNBC’s Squawk Box, Pompliano explained that many investors are currently chasing artificial intelligence stocks because of their strong momentum and record highs, while Bitcoin has attracted comparatively less attention.

According to Pompliano, markets typically move in cycles, with the assets investors ignore at one stage often becoming the biggest winners later on.

Pompliano said: “What people need to understand is that while AI stocks are surging and everyone is chasing momentum and record prices, the asset you should probably be buying is the one that has fallen out of favor for now but will regain attention later.”

Bitcoin still outperforms over the long term

Pompliano rejected the growing narrative that Bitcoin is a “poor-performing” asset, pointing to its long-term performance record.

He explained that when looking at one-year, two-year, five-year, and even ten-year periods, both Bitcoin and gold have consistently outperformed the S&P 500 in terms of compound annual growth rates.

Although gold is generally viewed as a safer and less volatile asset than Bitcoin, Pompliano argued that both assets have quietly delivered stronger long-term returns than many traditional equities.

At the same time, he acknowledged that recent underperformance has frustrated many investors, particularly as Bitcoin has failed to keep pace with the powerful rally in AI-related stocks over the past two years.

Money printing could become a catalyst for Bitcoin

Pompliano also linked Bitcoin’s future performance to broader macroeconomic conditions, particularly the continued expansion of the US money supply.

He argued that ongoing government spending, liquidity injections, and rising debt levels are likely to renew investor interest in Bitcoin over time.

“The big question is: Will the US government stop printing money? If it doesn’t—and I don’t think it will—then Bitcoin will eventually come back into focus,” Pompliano said.

He added that although Bitcoin has recently lost some appeal compared with high-flying AI stocks, market sentiment can shift quickly once investors begin searching again for alternative stores of value.