Japanese Yen consolidates against US Dollar amid uncertainty over future of Middle East

The Japanese Yen (JPY) trades flat against the US Dollar (USD) at around 162.50 during the Asian trading session on Tuesday, closer to its multi-decade high of 162.84. The USD/JPY pair will likely remain sideways as investors seek fresh cues regarding whether the United States (US) and Iran will announce a ceasefire or will continue exchanging attacks.

In the Asian trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades flat around 101.00.

According to a report from Axios, US President Donald Trump will either accept the 10-day ceasefire with Iran and resume negotiations towards an interim deal or call for a joint full-scale military campaign with Israel against Iran.

On Monday, a senior Iranian official confirmed receiving a proposal for a 10-day ceasefire from mediators to resume talks on an interim deal.

On the domestic front, investors await Japan’s National Consumer Price Index (CPI) data for June, which will be released on Friday. Investors will pay close attention to the inflation data to get cues regarding the Bank of Japan’s (BoJ) monetary policy outlook. The National CPI ex. Fresh Food is expected to arrive at 1.6% Year-on-Year (YoY), higher than 1.4% in May.

Meanwhile, the next key trigger for the US Dollar will be the preliminary S&P Global PMI data for July, which will be released on Thursday.