USD/JPY plunges 200 pips as Middle East tensions ease, oil crashes

USD/JPY has completed a dramatic round-trip, erasing a 200-pip gain to trade near 155.20 as geopolitical tensions in the Middle East showed signs of de-escalation. The pair initially surged to 157.20 on safe-haven flows amid Iran-Israel conflict concerns, but reversed sharply after President Trump acknowledged Iran's early warning, signaling diplomatic progress. Oil prices crashed over 4% with WTI falling below $78/barrel, reducing inflationary pressures and diminishing the need for aggressive Fed action. The yen strengthened across the board as risk sentiment improved and traders unwound defensive positions. Technical indicators show USD/JPY broke below the 156.00 support level with momentum accelerating to the downside. The 155.00 psychological level now acts as immediate support, while resistance has formed at 156.50. Traders should monitor further geopolitical developments and upcoming BOJ commentary for directional cues.