Markets stayed volatile early Friday, even as many European markets were shut for the Labour Day holiday. Later, the ISM will release the US Manufacturing PMI for April.<\/p>\n
USD\/JPY rose above 160.70, the highest since July, before dropping sharply during European hours. Reuters cited two sources saying Japan intervened for the first time in nearly two years, and USD\/JPY fell over 2% on Thursday.<\/p>\n
On Friday, USD\/JPY moved back above 157.00 in Asia, then fell again in Europe to below 156.50. This added to talk of a second intervention.<\/p>\n
Iran\u2019s negotiator Mohammad Bagher Ghalibaf said it is \u201cnot possible\u201d for Iran to open the Strait of Hormuz, citing ceasefire violations by the US and Israel. President Masoud Pezeshkian called the US naval siege of Iranian ports an \u201cextension of military operations\u201d.<\/p>\n
The Associated Press said US President Donald Trump is looking at ways to end the Strait of Hormuz shutdown while keeping the blockade on Iranian ports. It also reported coordination with allies to raise the costs of Iran disrupting energy flows.<\/p>\n
The ECB kept rates unchanged, while Reuters cited sources saying a June rise is expected and one more later if Brent stays above $100 and Hormuz disruption continues. EUR\/USD traded near 1.1750 after rising about 0.5% on Thursday.<\/p>\n
The BoE held its bank rate at 3.75%, with one MPC vote for a 25 basis point rise; GBP\/USD neared 1.3600 after nearly 1% gains on Thursday. The USD Index fell 0.9% Thursday and held near 98.00 Friday, while gold rose over 1.5% Thursday but slipped below $4,600 early Friday.<\/p>\n
We are looking at a very different market landscape compared to what we saw this time last year. In May 2025, we saw the Japanese authorities directly intervene when the USD\/JPY crossed 160, causing a sharp drop. With the pair now creeping back up toward 158 as of May 1, 2026, and the US-Japan 10-year yield spread still wide at over 350 basis points, derivatives traders should be pricing in a high probability of another intervention.<\/p>\n
The geopolitical risk premium in energy markets has also faded significantly over the past twelve months. We recall the intense situation in the Strait of Hormuz in 2025, which helped keep Brent crude prices threatening the $100 mark. Today, with diplomatic channels having eased the standoff, Brent is trading at a more subdued $85 per barrel, reminding us that such premiums can evaporate quickly.<\/p>\n
This easing of energy prices has completely changed the tone from central banks. We remember the European Central Bank was openly debating rate hikes last spring, but with recent Eurozone inflation figures now down to 2.4%, the market is pricing in rate cuts before the end of the year. This makes call options on the EUR\/USD, which was trading near 1.1750 last year and is now near 1.0700, seem particularly unattractive without a major catalyst.<\/p>\n
A similar story is unfolding in the UK, where the hawkish sentiment from the Bank of England in 2025 has given way to concerns over a stagnant economy. Last year, GBP\/USD was testing highs near 1.3600 amid talk of rate hikes. With UK first-quarter GDP growth for 2026 coming in at just 0.1%, the pound is struggling to hold 1.2500, and long positions look vulnerable.<\/p>\n
The broad US Dollar weakness we saw in May 2025, which pushed the DXY index to 98.00, has reversed course. The combination of a dovish turn from the ECB and BoE has provided a strong tailwind for the greenback. The DXY is now trading comfortably above 106.00, suggesting that puts on the Euro and Pound could be an effective way to play this renewed dollar strength.<\/p>\n
Gold has also reflected this normalization of risk from the peak we saw last year. The rush into safe havens during the geopolitical flare-up saw Gold prices reach toward $4,600. Now that those specific fears have subsided, Gold is trading at a much lower $2,350 an ounce, highlighting how sensitive it is to crisis-driven speculation.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Volatile markets as yen intervention suspected; Hormuz tensions rise; ECB, BoE steady; US PMI awaited; dollar weak.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-46393","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46393","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=46393"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46393\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=46393"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=46393"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=46393"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}