Japanese Yen recovers against US Dollar as oil prices correct sharply

The Japanese Yen regained some strength against the US Dollar on Thursday, as oil prices saw a sharp correction amid hopes of improved US-Iranian diplomacy. The USD/JPY pair fell by 0.2% to near 157.00. Iran reportedly proposed reopening the Strait of Hormuz, a key energy supply route, within a week if the US eased its military pressure.

Saudi Arabia prepared to resume crude oil exports from the Red Sea port of Yanbu and restart the East-West oil pipeline. Lower oil prices are beneficial for economies like Japan, which heavily rely on oil imports. The Bank of Japan is expected to make more interest rate hikes this year, with its recent hikes marking the start of a "new phase" of monetary policy.

The US Dollar Index retreated from a 52-day high, losing its safe-haven appeal due to the oil price decline. The USD/JPY pair traded at 156.96, remaining above the 20-period exponential moving average, suggesting a tentative bullish near-term outlook. The Relative Strength Index stood at 49.57, near the neutral line, indicating balanced momentum for further movement.