The Japanese yen rose in the Asian market on Thursday against a basket of major and secondary currencies, extending its gains for the second consecutive day against the US dollar and heading toward touching its highest level in three months, benefiting from weaker demand for the US currency as the best alternative investment amid de-escalation between the United States and Iran and growing hopes of a near peace agreement.

The yen’s rise comes under the watch of Japanese authorities, who confirmed that Japan faces no restrictions on the pace of its intervention in the foreign exchange market to support the local currency and that it remains in daily contact with US monetary authorities.

Price Overview

Japanese yen exchange rate today: The dollar fell against the yen by about 0.2% to ¥156.03, from the opening level of ¥156.33, and recorded a high of ¥156.53.

The yen ended Wednesday’s trading up by 1.0% against the dollar, marking its first daily gain in the past four days, and recorded its highest level in three months at ¥155.03, amid speculation of continued intervention by the Bank of Japan.

The US dollar

The dollar index fell on Thursday by about 0.15%, extending losses for the second consecutive session and heading toward touching its lowest level in three months, reflecting the continued decline of the US currency against a basket of global currencies.

Risk sentiment improved in global markets, and demand for the US dollar as a safe haven declined, amid easing tensions between the United States and Iran in the Strait of Hormuz and growing hopes of a near peace agreement.

Iran announced on Wednesday that it is reviewing a US peace proposal, and sources indicated that it would formally end the war, but would leave major US demands unresolved, namely Iran’s suspension of its nuclear program and the reopening of the Strait of Hormuz.

Japanese authorities

Japan’s top currency diplomat confirmed on Thursday that Japan faces no restrictions on the pace of its intervention in the foreign exchange market to support the local currency and that it remains in daily contact with US authorities.

The remarks by Atsuki Mimura, Vice Finance Minister for International Affairs, came ahead of US Treasury Secretary Scott Bessent’s visit to Tokyo next week, where he is expected to discuss yen movements with Japanese Finance Minister Satsuki Katayama.

Mimura told reporters: “Our focus, consistently and without change, extends in all directions,” stressing that Tokyo still sees speculative movements in the currency market.

Sources told Reuters that Japanese authorities intervened in the foreign exchange market last Thursday, and money market data indicate that they sold about $35 billion to support the yen. Since then, the market has witnessed three sudden declines in the value of the yen through Wednesday.

Japanese interest rates

Pricing for the probability of the Bank of Japan raising interest rates by a quarter percentage point at the June meeting is currently stable around 65%.

In order to reprice those probabilities, investors are awaiting the release of more data on inflation, unemployment, and wage levels in Japan.

Oil prices declined sharply on Wednesday, driven by market optimism over the United States and Iran nearing an agreement to end the conflict that caused the largest energy supply disruption in history.

Brent crude futures, the global benchmark, fell about 6% to $103.23 per barrel by 8:19 a.m. Eastern Time, after prices earlier in the session dropped below $100. US West Texas Intermediate crude futures also declined about 7% to $95.22 per barrel.

Two US officials and two informed sources told Axios that the White House believes it is close to reaching a one-page memorandum of understanding containing 14 points aimed at ending the war and establishing a framework for more detailed nuclear talks.

However, US President Donald Trump expressed doubts on Wednesday about finalizing the agreement, saying that assuming Iran would accept the proposal might be “a big assumption,” while warning of renewed military strikes if Tehran rejects it.

Trump said in a social media post: “If they do not agree, the bombing will begin, and it will — unfortunately — be at a much higher level and with far greater intensity than before.”

According to the report, Iran is expected to respond to several key points within the next 48 hours, although no agreement has yet been reached, despite sources indicating that this is the closest point the two sides have reached since the outbreak of the war on February 28.

A spokesperson for the Iranian Foreign Ministry told CNBC that Tehran is “evaluating” the US proposal, after previously confirming that it would only accept a “fair” peace agreement.

Trump had announced on Tuesday the temporary suspension of “Project Freedom,” a military operation launched just one day earlier to escort commercial ships through the Strait of Hormuz, pointing to progress achieved in negotiations with Iran.

The US administration explained that around 23,000 sailors aboard ships from 87 countries are stranded in the Arabian Gulf as a result of Iran’s effective closure of the strait.

Warren Patterson, head of commodities strategy at Dutch bank ING, said in a research note that reaching an agreement restoring oil flows through the Strait of Hormuz is critically important.

He added that about 13 million barrels per day of disrupted supplies are currently being compensated through inventories that are declining rapidly, making the market more vulnerable to volatility over time, noting that shrinking inventories would increase oil price fluctuations.

Nicolo Bocchin, co-head of fixed income at Azimut Group, warned that the sharp rise in energy prices has already started to reduce global demand, adding that even if the waterway is reopened, restoring shipping and trade flows to normal could take “many weeks.”

Central Asian countries have become a key channel for Russia’s sanctions-evasion trade, providing “logistical and financial support for transshipment networks” dedicated to securing goods for the Russian war machine, according to findings documented by a monitoring group.

A report titled Russia Sanctions Evasion Research 2025-2026, issued by the Washington-based Center for Global Civil and Political Strategies, stated that “Russia has demonstrated significant adaptability in reducing the operational impact of Western sanctions,” adding that Central Asia represents “a critical backdoor route” for Russian imports.

The report confirmed that flows of “certain” goods listed under the Joint High Priority List, which includes components such as capacitors and transceivers alongside ball bearings and machine tools, increased in 2025 from Kazakhstan, Kyrgyzstan, and Uzbekistan to Russia.

It added that Kazakhstan and Kyrgyzstan “benefit from open borders with Russia under the Eurasian Economic Union, removing customs scrutiny on intra-bloc trade.” According to the report, Western-made dual-use electronics, microchips, and communications equipment are imported into Kazakhstan or Kyrgyzstan as civilian goods, then legally re-exported to Russia under local trade codes.

Although Central Asian governments deny helping Russia circumvent sanctions, the figures present a more complex picture. In Kazakhstan’s case, exports of priority goods to Russia surged by more than 400% in 2022, indicating the existence of “an organized circumvention mechanism supported by shared infrastructure and limited oversight.” However, these exports have declined sharply over the past two years, while several Kazakh entities have been subjected to Western sanctions.

The report concluded that the Kazakh government is not systematically complicit, but noted that Astana’s membership in the Eurasian Economic Union and its long border with Russia “create structural loopholes that circumvention networks can exploit.”

Kyrgyzstan, meanwhile, has faced scrutiny not only for routing goods to Russia, but also for its role in financing Russian procurement operations by facilitating access to international financial markets. The report described it as “an increasingly prominent node within broader sanctions-evasion networks.”

It added that analysts in 2025 identified cryptocurrency platforms registered in Kyrgyzstan as potential channels for Russia-linked financial flows, with concerns that some of these platforms operate as front entities or substitutes for previously sanctioned platforms within a parallel Eurasian financial network.

In 2025, officials in the United States, the European Union, and the United Kingdom found sufficient evidence of sanctions-evasion activities, leading to sanctions on several Kyrgyz banks, in addition to the cryptocurrency platform “Grinex.” In April, the European Union imposed “anti-circumvention” sanctions on the Kyrgyz government as part of its twentieth sanctions package.

In the Caucasus region, the report stated that Georgia is considered “one of the most prominent high-risk transit and re-export points,” while Azerbaijan plays the role of a major logistics hub in the North-South Corridor linking Russia with Iran, India, and other regions.

The report recommended that Western sanctions enforcement mechanisms strengthen monitoring resources at “geographic chokepoints” linked to circumvention activities, including Central Asia.

It also called for tighter oversight and targeted sanctions on financial actors facilitating these operations, such as insurers, legal service providers, companies, and financial institutions.

The report concluded by emphasizing that “targeting intermediary service providers can create broader deterrence across sanctions-evasion networks.”

The S&P 500 and Nasdaq indices recorded new record highs on Wednesday, continuing the strong rally driven by ongoing enthusiasm surrounding artificial intelligence, alongside expectations of a peace agreement between the United States and Iran.

The latest wave of enthusiasm in the AI sector came after Advanced Micro Devices forecast second-quarter revenue above expectations, supported by strong demand for data center chips.

Kevin Gordon, head of macroeconomic and strategy research at Schwab Center for Financial Research, said that the market “cannot escape the state of euphoria surrounding investment in artificial intelligence.”

He added that a prolonged war and higher gasoline prices could pressure spending, but in the absence of clear signs of job losses, the economy remains far from entering a full recession.

The ADP National Employment Report showed that US private sector employment increased by 109,000 jobs in April, marking the largest increase since January 2025.

At the same time, oil prices fell to their lowest levels in two weeks, with Brent crude contracts declining by 6.6%, leading the S&P 500 energy sector index to fall by about 3%. A Pakistani source reported that Washington and Tehran are nearing an agreement on a one-page memorandum of understanding to end the war.

According to a report published by Axios, the memorandum would stipulate ending the conflict and beginning a 30-day negotiation period to reach a detailed agreement that includes reopening the Strait of Hormuz, limiting Iran’s nuclear program, and lifting US sanctions.

The gains in equities reflect increased investor risk appetite, especially as corporate earnings remain strong and hopes for reaching a peace agreement persist. However, some analysts warned against excessive optimism in the absence of clearer signals of actual progress.

Kyle Rodda, senior financial market analyst at Capital.com, said that Wall Street continues to bet that the war in the Middle East will not escalate again and will not disrupt the market rally driven by earnings.

He added that there is a significant risk that if this bet proves wrong, high-risk assets could face a sharp reversal, but noted that signals coming from the United States appear reassuring that it is not seeking renewed escalation.

During trading, the Dow Jones Industrial Average rose by about 450.72 points, or 0.91%, to 49,744.78 points, while the S&P 500 gained 57.64 points, or 0.79%, to 7,316.86 points, and the Nasdaq Composite climbed 256.35 points, or 1.01%, to 25,582.48 points.

Eight of the 11 major sectors within the S&P 500 posted gains, while the Philadelphia Semiconductor Index rose by 2.9% to record a new all-time high.

Advanced Micro Devices shares jumped by 16.7%, while rival Intel gained 2.7%. Super Micro Computer shares also rose by 16.6% after strong fourth-quarter revenue and earnings forecasts.

Alphabet shares rose by 1.5%, while Nvidia shares jumped by 4%.

Advancing stocks outnumbered decliners by a ratio of 2.27 to 1 on the New York Stock Exchange, and by 1.54 to 1 on the Nasdaq. The S&P 500 recorded about 36 new 52-week highs against 13 new lows, while the Nasdaq recorded 115 new highs and 50 new lows.