The Japanese yen rose broadly in the Asian market on Wednesday against a basket of major and minor currencies, extending its gains for the second consecutive day against the US dollar and recording its highest level in a week, driven by improved sentiment in global markets after the United States and Iran agreed on a two-week ceasefire, which includes the opening of the Strait of Hormuz to global navigation.

With the sharp drop in global oil prices, indicators of receding inflationary pressures on monetary policymakers at the Bank of Japan are increasing, which reduces the likelihood of raising Japanese interest rates later this month.

Price Overview

- Japanese yen exchange rate today: the dollar fell against the yen by 0.8% to (¥158.29) as the lowest level in a week, from the opening price today at (¥159.59), and recorded a high of (¥159.75).

- The yen ended Tuesday's trading up by less than 0.1% against the dollar, marking its second gain in three days, based on hopes of ending the Iranian war.

US Dollar

The dollar index fell on Wednesday by 0.7%, deepening its losses for the third consecutive session and recording a four-week low at 98.84 points, reflecting a broad decline in the levels of the American currency against a basket of global currencies.

Risk sentiment in the markets improved, and investor appetite for buying global assets and currencies increased following the ceasefire agreement between the United States and Iran.

Iran War Updates

- Washington and Tehran agree on a two-week ceasefire and plan to open the Strait of Hormuz.

- US President Donald Trump agreed to suspend attacks and aerial bombardment against Iran for 14 days, following intensive Pakistani and Qatari mediation.

- Iran announced its agreement to reopen the Strait of Hormuz to international navigation "fully and safely," with technical coordination with the Iranian armed forces to secure the passage of ships.

- Direct negotiations to end the war are scheduled to begin next Friday in the city of Islamabad in Pakistan, as the truce aims to provide an opportunity for a diplomatic solution.

Global Oil Prices

Global oil prices fell by an average of 13%, recording their lowest levels in several weeks, as concerns over global supply shortages receded, especially after the reopening of the Strait of Hormuz to giant oil tankers.

Japanese Interest Rates

- Following the fall in global oil prices, the pricing of the probabilities of the Bank of Japan raising interest rates by a quarter of a percentage point in the April meeting fell from 10% to 5%.

- In order to re-price those probabilities, investors await the release of more data on the levels of inflation, unemployment, and wages in Japan.

Wheat contracts in Chicago fell on Tuesday under pressure from expectations of long-awaited rainfall that may improve crop prospects in the drought-affected US Plains.

In contrast, corn and soybean prices rose slightly supported by the rise in crude oil prices. One grain trader in Singapore said: "There is some rain expected for the hard red winter wheat regions in the United States, and global supplies are generally sufficient at the moment."

The most active wheat contract on the Chicago Board of Trade (CBOT) fell by 0.1% to reach $5.94 and 3/4 per bushel at 02:26 GMT. Meanwhile, corn added 0.1% to record $4.54 and 1/4 per bushel, and soybeans rose half a cent to reach $11.67 and 1/4 per bushel.

Wheat prices declined with rain forecasts in the Plains region, which may strengthen the yield opportunities for winter wheat in the heart of the US wheat belt. Meteorologists indicated that beneficial rains are expected in the eastern two-thirds of the wheat belt during the next ten days, with a lower probability in the far western third of the region.

US winter wheat crop ratings came in at 35% good to excellent in the first weekly crop report for the 2026 season issued by the US Department of Agriculture, after the markets closed on Monday, recording the lowest level for this time of year since 2023, compared to 48% in the previous year, and analysts had expected 42% according to a Reuters poll.

Oil prices continued gains on Tuesday after US President Donald Trump escalated his rhetoric toward Iran, threatening to take stronger actions if the country fails to reopen the Strait of Hormuz, which is a major transit point for global oil. Grain and vegetable oil prices are often affected by energy prices, given the increasing use of agricultural products in the renewable fuel industry.

The Canadian dollar rose against its American counterpart on Tuesday, but the gains were limited after the release of disappointing domestic data, and as investors await the deadline set by American President Donald Trump for Iran to end its blockade on Gulf oil.

The Canadian currency was trading at a rise of 0.1% at 1.3900 against the American dollar, or 71.94 American cents, after it moved within a range of 1.3892 to 1.3929. The currency touched last week its lowest level in about four months at 1.3966.

Global markets entered a period of high uncertainty before the 8 PM Washington time (00:00 GMT) deadline set by Trump, as investors weigh potential scenarios from a ceasefire to a new military escalation and their effects on oil, currencies, and high-risk assets.

Aaron Hurd, portfolio manager in the currency group at State Street Global Advisors, said: "The Canadian dollar benefits from the rise in energy prices, but the United States does as well, and I believe the United States is more capable of adapting to the shock compared to Canada. We have witnessed the weakness of the Canadian dollar against the American dollar during the past few weeks, and I believe we will reverse part of that quickly if an agreement is reached. As for if there is no agreement and the situation escalates – things will remain approximately as they are."

The price of oil, which is one of the main exports for Canada, rose by 0.5% to reach $112.95 per barrel. Investors globally worry that the rise in energy prices may increase inflation and negatively affect economic growth.

Canadian economic activity declined in March for the first time in four months, while indices of price pressures rose, according to the Ivey Purchasing Managers Index data, as the seasonally adjusted index dropped to 49.7 last month compared to 56.6 in February.

It is expected that the Canadian jobs report for March, scheduled for release on Friday, will provide additional indicators about the state of the domestic economy, as economists expect the addition of 15,000 jobs after the economy lost 84,000 jobs in February.

Canadian bond yields also moved upward across the yield curve, with the yield on 10-year bonds rising by 4.6 basis points to reach 3.515%.

Aluminum prices rose on Tuesday, and the main price spread for contracts on the London Metal Exchange jumped, with the market pricing in confirmations that a smelter in the Emirates will face a long repair period after an Iranian attack that occurred late last month.

The aluminum contract for three-month delivery on the London Metal Exchange rose by 1.1% to reach $3,507 per metric ton in official open-outcry trading.

Emirates Global Aluminium said on Friday that restoring full production at the Al Taweelah smelter, which produced 1.6 million tons of cast metal in 2025, may take up to a full year, after entering an emergency shutdown following the attacks of March 28.

Marex analyst Ed Meir said in a note that this represents a relatively long period of downtime, adding that a major disruption in the Gulf region may push the aluminum market into a noticeable deficit during the current year.

The premium of the spot aluminum contract on the London Metal Exchange compared to the three-month contract reached $77 per ton on Tuesday, which is the highest level since 2007, compared with $61 in late March, indicating a narrowing of the supply available for immediate delivery.

In the broader markets, investors adopted a wait-and-see approach with the approaching deadline imposed by American President Donald Trump to reach an agreement with Iran, which threatens to escalate the conflict.

At the same time, copper on the London Metal Exchange fell by 0.1% to $12,344 per ton in official trading, affected by the rise in inventories within the exchange system.

Goldman Sachs had raised on Monday its expectations for the global copper market surplus this year to 490,000 tons compared to a previous expectation of 380,000 tons, after economists at the bank estimated that the rise in energy prices may cut about 0.4 percentage points from global GDP growth.

Daily data released by the London Metal Exchange showed that copper inventories in its registered warehouses rose to 378,775 tons, which is the highest level in eight years, after inflows amounting to 16,125 tons in Asia, Europe, and the United States on April 2.

In the rest of the metals traded on the London Metal Exchange, zinc rose by 1.8% to $3,322.5 per ton, while lead stabilized at $1,933 per ton, and they had recorded earlier in the session the highest level since March 11.

In contrast, tin fell by 0.6% to $46,000 per ton, and nickel fell by 0.5% to $17,000 per ton.