The Japanese yen rose in Asian trading on Thursday against a basket of major and minor currencies, resuming its recovery against the US dollar and stabilizing above a 20-month low, supported by renewed buying from lower levels following the Bank of Japan’s monetary policy decision.

The Bank of Japan kept interest rates unchanged for the second consecutive meeting, stating that the Japanese economy is “recovering moderately” despite uncertainty stemming from geopolitical conflicts.

Price overview

Japanese yen exchange rate today: the dollar fell 0.2% against the yen to ¥159.54, from the session opening level of ¥159.81, after recording a high of ¥159.85.

The yen ended Wednesday’s trading down more than 0.5% against the dollar, marking its first loss in three days, after hitting a 20-month low of ¥159.90.

Bank of Japan

In line with most market expectations, the Bank of Japan on Thursday kept its benchmark interest rate unchanged at 0.75%, the highest level since 1995, for the second consecutive meeting.

The decision to hold rates was approved by an 8–1 vote, with one member calling for a 25 basis point increase to 1.0%, as policymakers preferred to pause and assess recent economic developments.

The Bank of Japan warned that the war with Iran and tensions in the Middle East are pushing crude oil prices higher, creating upward pressure on core inflation in Japan.

The central bank added that while core inflation is expected to temporarily slow below 2% in the near term due to easing rice price increases, the Middle East conflict will exert upward pressure driven by the recent rise in crude oil prices.

Japanese interest rates

Following the meeting, market pricing for a 25 basis point rate hike at the April meeting remained below 30%.

Investors are awaiting further data on inflation, unemployment, and wages in Japan to reassess these expectations.

Kazuo Ueda

Bank of Japan Governor Kazuo Ueda is scheduled to speak shortly on the outcome of the policy meeting, with his comments expected to provide further strong clues about the future path of policy normalization and interest rate hikes this year.

Opinions and analysis

Analysts at Capital Economics wrote that the Bank of Japan did not reveal much by keeping rates unchanged today, but they still expect a rate hike at the next meeting in April.

They added that the brief statement provided little clarity on the future path of monetary policy, and that more insight is likely to come from Governor Ueda’s press conference later today.

US dollar

The dollar index fell 0.25% on Thursday, reflecting weakness in the US currency against a basket of global currencies.

On Wednesday, the Federal Reserve kept interest rates unchanged for the second consecutive meeting, while projecting higher inflation, stable unemployment, and only one rate cut this year.

Federal Reserve Chair Jerome Powell described this outlook as highly uncertain, as policymakers assess the impact of US-Israeli strikes on Iran.

Wall Street closed sharply lower on Wednesday after the US Federal Reserve kept interest rates unchanged and projected only one rate cut this year, as officials assessed economic risks stemming from higher oil prices and the war between the United States, Israel, and Iran.

Updated projections from policymakers at the US central bank showed that the benchmark interest rate would decline by just a quarter percentage point by year-end, with no indication of the timing.

Major US stock indices extended their losses following Federal Reserve Chair Jerome Powell’s press conference, where he reiterated the uncertainty the war poses to the economic outlook.

Michael Rosen, Chief Investment Officer at Angeles Investments in Santa Monica, California, said: “The Fed is in wait-and-see mode. With inflation still above target, the economy running above trend, and elevated uncertainty around the path of the Iran war, there is no justification for easing policy.” He added: “The Fed’s biggest challenge, worsened by the war, is balancing its dual mandate of full employment and low, stable inflation. If the war persists and oil prices remain high, the economy will slow. But easing policy would be a mistake because it would fuel inflation.”

Earlier, the US Labor Department reported that producer prices rose 3.4% year-on-year, exceeding economists’ expectations of 2.9%, with the potential for further acceleration due to the Middle East conflict and rising shipping and oil costs.

Brent crude prices rose to nearly $110 per barrel following reports of attacks on Iranian oil facilities in the Pars and Asaluyeh regions.

On the indices front, the S&P 500 fell 1.36%, or about 91 points, to close at 6,624.70, its lowest level in nearly four months. The Nasdaq Composite declined 1.46%, or 327 points, to 22,152.42, while the Dow Jones Industrial Average dropped 1.63%, or about 768 points, to 46,225.15.

All 11 sectors of the S&P 500 ended lower, led by consumer staples, down 2.44%, followed by consumer discretionary, down 2.32%.

At the company level, AMD shares rose 1.6% after reaching an agreement with Samsung Electronics to expand their strategic partnership in supplying memory chips for AI infrastructure, while Nvidia fell 0.8% after receiving Beijing’s approval to sell its second-most advanced AI chips in China.

Micron Technology shares declined about 0.5% despite beating quarterly revenue estimates, supported by strong demand for AI-related memory chips. Meanwhile, Apollo Global Management rose 2.1% after rebounding from last week’s losses, Lululemon gained 3.8% following its earnings release, and Macy’s jumped 4.7% after forecasting a smaller tariff impact in the second half of the year and reporting better-than-expected quarterly profits.

Declining stocks dominated the market, outnumbering advancers on the S&P 500 by a ratio of 5.2 to 1, with 17 new highs and 15 new lows recorded. On the Nasdaq, 42 stocks hit new highs while 218 recorded new lows.

Trading volume on US exchanges was relatively light, with 19.4 billion shares changing hands, compared with an average of 19.8 billion over the past 20 sessions.

Gold prices fell on Wednesday after the US Federal Reserve kept its overnight interest rate unchanged, in line with expectations.

Spot gold traded down 2.2% at $4,895.61 per ounce, while gold futures declined 2.4% to $4,889.80 per ounce.

Despite holding policy steady, the Fed projected one rate cut in 2026, also pointing to uncertainty stemming from the war between the United States and Iran.

In its statement, the central bank said: “The implications of developments in the Middle East for the US economy remain uncertain.”

Semiconductor production could be negatively affected by the ongoing conflict in the Middle East due to supply chain disruptions, particularly in helium supplies, which are a key component in chip manufacturing.

Some unexpected industries are coming under severe pressure as a result of the war with Iran, with multiple supply chains facing sharp disruptions that extend beyond oil and gas. This could lead to significant delays in semiconductor production unless major powers reach agreements to halt the conflict and reopen vital trade routes.

Helium is a critical component in semiconductor manufacturing, as it is used in chip production processes and helps maintain optimal conditions during fabrication. In photolithography, helium is used to create a stable vacuum environment and ensure precise alignment and exposure of photomasks. It also contributes to cooling semiconductor materials, reducing thermal stress that could negatively affect chip performance.

Unlike other industrial gases, there is no effective substitute for helium in chip production. As a noble gas, helium is chemically inert, reducing contamination risks during manufacturing. Its low thermal conductivity supports precise temperature control, while its light weight and small atomic size allow it to be used in ultra-clean environments.

The use of helium enables manufacturers to achieve higher levels of precision and control in electronic circuit design.

Helium is a byproduct of liquefied natural gas production, meaning LNG suppliers are often also major helium exporters. Some semiconductor manufacturers rely heavily on specific markets for helium supply, putting them in a difficult position when disruptions occur and forcing them to seek alternative sources.

In South Korea, one of the world’s leading semiconductor producers, several companies rely heavily on Middle Eastern countries for helium imports. For example, in 2025, the company “Jokan” imported about 64% of its helium needs from Qatar.

South Korea and Taiwan together account for around 36% of global semiconductor production.

The dependency is not limited to one country, as QatarEnergy’s massive Ras Laffan facility supplies nearly one-third of global helium. However, the facility was shut down for more than a week after Iranian drone strikes forced a suspension of operations.

The shutdown immediately cut global helium supplies by 30%.

Qatar and several other Middle Eastern countries rely heavily on the Strait of Hormuz, a vital trade route connecting the Arabian Gulf to the Gulf of Oman and the Arabian Sea, for transporting goods. The strait represents a strategic chokepoint due to the limited alternatives for energy transport, aside from some restricted pipeline networks in the region.

The near-total closure of the strait has not only caused the largest disruption in oil supplies in history, but also significantly disrupted supply chains between Europe and Asia.

The United States is the world’s largest producer of helium, meaning countries unable to source the gas from the Middle East may turn to the US as an alternative. However, Washington is unlikely to meet the sudden surge in demand quickly enough.

Russia is also a major helium producer, but broad sanctions imposed after its 2022 invasion of Ukraine have made investors hesitant to enter the Russian market or import its goods.

At present, South Korean companies such as Samsung, SK Hynix, and TSMC fear that these disruptions could reduce their production until alternative helium sources are secured.

Meanwhile, global demand for semiconductors continues to rise year after year, driven by the rapid expansion of advanced technologies such as artificial intelligence. Some companies fear they may be unable to meet orders on time, potentially forcing them to produce lower-margin chips to fulfill commitments.

However, SK Hynix recently announced that it has diversified its helium supply sources and secured sufficient inventory in the short term.

It remains unclear how long the war with Iran, or the broader Middle East conflict, will last, particularly as US President Donald Trump stated that the United States intends to continue its operations in Iran until “complete victory” is achieved.

If the war continues for several months, helium supply disruptions are likely to persist, which could push semiconductor prices higher over the medium term.

The helium supply crisis from Qatar highlights the fragility of semiconductor supply chains, as major chip-producing countries rely heavily on Doha in this area.

The conflict in the Middle East may push producers to seek alternative helium sources, both in the short and long term, and could also encourage companies to strengthen regional supply chains to reduce exposure to future geopolitical disruptions.