USD/JPY Nears 160 as Oil Rises, Risk Sentiment Fades on Iran Tensions

USD/JPY is approaching the critical 160.00 handle as risk sentiment deteriorates across global markets, with the S&P 500 erasing most of Monday's gains amid fading optimism and weekend hedging activity. Oil prices have climbed back, recovering from Monday's drop, as geopolitical tensions intensify following Iran's rejection of ceasefire proposals and Trump's warning that Iran should 'get serious soon.' The risk-off environment is weighing on equity markets while supporting safe-haven flows into the US dollar. On the central bank front, the BOJ announced plans to release monthly indicators for estimated core CPI, potentially increasing transparency around future policy decisions. In Europe, ECB policymaker Nagel stated that an April rate hike remains an option but is not the only path forward, while BOE's Breeden also provided commentary on current conditions. Traders should watch the 160.00 psychological resistance on USD/JPY closely, as a break above could trigger further momentum. Near-term direction hinges on geopolitical developments and weekend risk positioning.