USD/JPY faces pressure as Iran nuclear tensions escalate geopolitical risks

USD/JPY has retreated 0.4% to 156.20 as safe-haven demand for the yen intensifies amid escalating Middle East tensions. Prime Minister Netanyahu's warnings about Iran's nuclear ambitions and planned strategic discussions with the Trump administration have heightened geopolitical uncertainty, driving investors toward traditional safe assets. The Japanese currency gained across the board, with cross pairs like EUR/JPY and GBP/JPY falling 0.5% and 0.6% respectively. Gold simultaneously surged 1.2% to $2,042 per ounce, confirming the risk-off sentiment. The dollar index weakened 0.3% as traders reassess Federal Reserve rate expectations in light of potential geopolitical disruptions to global growth. Technical indicators show USD/JPY breaking below the key 156.50 support level, with the next target at 155.80. Traders should monitor developments in US-Iran relations and any shifts in defense sector positioning, which could further influence safe-haven flows.