Yen Drops as Investors Embrace Risk, Eyes on BoJ Decision

On Monday’s Asian session, the Japanese yen slipped against major currencies as investors adopted a risk-on approach. This mood was supported by strong rises in energy and mining stocks, which surged along with climbing commodity prices amid worsening Middle East tensions.

Even so, worries persist that these geopolitical strains might ignite a full-scale conflict in the region, keeping market sentiment cautious.

Traders have their attention focused on upcoming monetary policy meetings by the Bank of Japan (BOJ) and the U.S. Federal Open Market Committee (FOMC), seeking guidance on future policy and fresh market momentum.

The consensus expects the BOJ to keep its benchmark rate at 0.5 percent during the June meeting, though some economists predict an increase early next year.

During the Asian trading session, the yen slid to nearly one-year lows, trading at 167.22 per euro and 178.10 per Swiss franc, compared to last week’s close of 166.46 and 177.62 respectively. If the downward trend continues, the yen may find support around 169.00 per euro and 179.00 per franc.

Against the British pound and the U.S. dollar, the yen fell to five-day lows of 196.18 and 144.61, up from Friday’s closes of 195.47 and 144.10. Next support levels for the yen are seen at 198.00 against the pound and 148.00 against the dollar.

Looking forward, market participants are awaiting key data releases, including Canadian housing starts for May, the U.S. New York Empire State Manufacturing Index for June, and the U.S. NOPA crush report, all scheduled during the New York session.