The Japanese yen declined in Asian trading on Tuesday against a basket of major and secondary currencies, resuming losses that had temporarily paused yesterday against the US dollar and approaching its lowest level in nearly two weeks, after Nikkei reported that US monetary authorities conducted reviews of the dollar/yen exchange rate without a request from Japanese monetary authorities.

As inflationary pressures ease on policymakers at the Bank of Japan, expectations for a Japanese interest rate hike in March have declined. Investors are now awaiting المزيد of key economic data from Japan to reassess those expectations.

Price Overview

The Japanese yen exchange rate today: the dollar rose against the yen by 0.45% to 155.31 yen, up from the opening level of 154.64 yen, while recording a session low of 154.52 yen.

The yen ended Monday’s trading up 0.25% against the dollar, marking its first gain in four sessions, as part of a recovery from a nearly two-week low of 155.64 yen.

Aside from buying at lower levels, the Japanese yen rebounded due to concerns linked to Trump’s tariff moves following the historic US Supreme Court ruling.

Monetary authorities

Japan’s Nikkei newspaper, citing unnamed US government sources, reported that US monetary authorities initiated “exchange rate reviews” last January to support the yen.

The newspaper said the exchange rate reviews conducted by the Federal Reserve Bank of New York, on behalf of the US Treasury Department, were carried out without a request from Japan’s Ministry of Finance.

The report added that US Treasury Secretary Scott Bessent led the exchange rate review process amid concerns that political instability ahead of Japan’s general election could destabilize Japanese markets and spill over into global financial markets.

According to the newspaper, citing senior officials close to Bessent, US authorities viewed the exchange rate review as a preliminary step toward possible intervention through yen purchases, and considered intervening in the currency market to support the yen if Tokyo requested it.

Several senior US officials said the exchange rate review led by Bessent was based on the principle that the United States is prepared to use its economic strength to promote stability for its allies.

Japanese interest rates

Data released at the end of last week in Tokyo showed Japan’s core inflation rate fell in January to its lowest level in two years, easing inflationary pressure on the Bank of Japan.

Following that data, pricing for a quarter-point interest rate hike by the Bank of Japan at its March meeting fell from 10% to 3%.

Pricing for a quarter-point rate hike at the April meeting also declined from 50% to 30%.

According to the latest Reuters poll, the Bank of Japan may raise interest rates to 1% by September.

Investors are now awaiting additional data on inflation, unemployment, and wage growth in Japan to reassess these expectations.

Ripple Labs Inc. (XRP) rose above the $1.40 level at the time of writing on Monday, despite renewed pressure stemming from tariff-related tensions across the broader cryptocurrency market. The decline to $1.33 — the session low — was linked to macroeconomic uncertainty, geopolitical tensions, and a shift by investors toward lower-risk assets.

Slowing investment flows into XRP as capital exits Bitcoin and Ethereum

Investment flows into XRP-related products declined to $3.5 million last week, according to a report by CoinShares International Limited. This represents a 90% drop compared with the previous week’s inflows of $33 million. Average assets under management stand at approximately $2.6 billion, while year-to-date inflows have reached $151 million.

By contrast, Bitcoin investment products remained under selling pressure, recording outflows of $215 million last week. Despite the selling that pushed the cryptocurrency below $65,000, total assets under management stood at $104 billion, while year-to-date outflows reached around $1.3 billion.

The CoinShares report said Bitcoin was the main driver of negative market sentiment, with inverse Bitcoin investment products recording inflows of $5.5 million — the largest among asset categories.

Ethereum also recorded outflows of $36.5 million last week, bringing total year-to-date outflows to $494 million.

Retail investor interest remains stable

Derivatives data indicates stable retail investor interest in XRP, as open interest in XRP futures contracts rose to $2.4 billion on Monday, compared with $2.33 billion the previous day, according to CoinGlass data.

Rising open interest signals increased risk appetite among investors, which could improve the chances of a price recovery in upcoming sessions.

Technical analysis: recovery prospects remain limited

XRP is trading around $1.40, supported by the MACD indicator, which remains above the signal line on the daily chart. However, the shrinking green histogram bars suggest that upside momentum may be limited.

At the same time, the relative strength index (RSI) stands at 39, well below the neutral zone, reflecting continued weakness in the currency’s broader technical structure.

Last September, I prepared a brief presentation outlining the world’s major conflicts and wrote the following about the Israel-Iran confrontation — now referred to as the “Twelve-Day War”: “There are every reasons to believe that the conflict between Israel and Iran is not over, and that the United States could be drawn back into it.”

The next phase of that war now appears to be approaching. In fact, attacks may already have begun by the time you read these lines.

What puzzles me is that the rest of the world has treated the buildup to this second phase as if it were insignificant. Although the large US military deployment received media coverage, other stories — such as the Supreme Court of the United States overturning tariffs imposed by President Donald Trump’s administration, and the ongoing fallout from the Epstein files — received equal or even greater attention. Financial markets, meanwhile, showed only limited disruption, confined mainly to a relatively modest rise in oil prices.

This apparent calm seems to rest on two main assumptions:

First, many believe President Trump will resort to what is informally known as “TACO,” a term suggesting that “Trump always chickens out.” This assumption is based on the idea that, as in many previous cases, the president will not follow through on his initial threats. The argument points to repeated instances where tariff levels were announced and then scaled back or softened once global markets began to fall sharply. According to this logic, it is assumed that he will stop short of attacking Iran, announce an agreement that delivers less than originally demanded, and then declare victory.

Second, the other pillar supporting this calm is the belief that Iran will not follow through on its threats if a new conflict breaks out, or at least that it would not be very effective in doing so. These threats include attacking US bases in the region, targeting any country assisting US and Israeli war efforts, striking US naval vessels, and most importantly closing the Strait of Hormuz, through which roughly 20% of global oil and liquefied natural gas exports pass. Such a closure would not only affect Iran, but also major oil and gas exporters including Iraq, Kuwait, Saudi Arabia, Qatar, and the United Arab Emirates.

Based on the old saying that “no plan survives first contact with the enemy,” here is why such expectations may be overly optimistic:

First, all statements from the Israeli government suggest that anything short of a comprehensive attack on Iran will not be acceptable, given that the Iranian government is unlikely to agree to Israeli demands, which include restrictions on Iran’s ballistic missile program and ending support for groups such as Hamas and Hezbollah. Iranian officials have so far insisted that negotiations should focus solely on the country’s nuclear program. The United States has also indicated that missile restrictions and ending support for allied militias must be part of any negotiations.

The previous conflict, the “Twelve-Day War,” began with an Israeli strike. I believe that if the United States does not launch an attack first or alongside Israeli forces, Israel may simply start the conflict and then request US support. It is highly likely that Trump would provide that support.

Second, both the Israeli and US governments have made it clear that their preferred outcome is regime change in Iran. I do not know whether the Iranian government believes this, but if it does, the next phase of the conflict would be viewed as an existential threat. In that case, Iran would have little reason to restrain its response, believing it has little to lose in pursuing a full-scale confrontation. It is hardly surprising that the Supreme Leader and the ruling circle would not wish to see the inside of a US prison.

If these two assumptions are correct, the calm currently seen in financial markets and world capitals could quickly turn into panic. Iran is unlikely to match the military strength of the United States and Israel, but it can still inflict significant damage through its arsenal of missiles and drones. Its most powerful weapon, however, would be closing the Strait of Hormuz. Oil prices would rise sharply, and the longer the strait remained closed, the greater the risk of global economic paralysis due to fuel shortages and surging prices.

Iran would not need to fully control the strait to halt oil shipments; it would only need to make passage unsafe. It possesses the drones, missiles, and patrol vessels required to do so. This would likely cause insurers to withdraw coverage, effectively halting tanker traffic. No shipping company would risk transporting two million barrels of oil — the capacity of a standard large crude carrier — worth more than $132 million at current prices without insurance.

Of course, the US Navy could escort tankers through the strait, but those vessels and tankers would then become targets for Iranian swarm attacks using missiles and drones. Defensive systems must intercept every incoming threat to avoid damage, whereas attackers need only one missile or drone to penetrate defenses to cause serious harm.

The United States may be able to neutralize such threats, but it is difficult to imagine tanker captains and their crews willingly testing that protection on every voyage. It is also unlikely that insurers would agree to cover tankers crossing the Strait of Hormuz under such circumstances.

I hope this conflict can be avoided and that a settlement allowing all sides to step back permanently can be reached. But hope is not a plan. Given Donald Trump’s background in entertainment and his inclination toward dramatic outcomes, we should not be surprised if events unfold like a Hollywood film, where an unwritten rule holds that if a weapon appears on screen, it must be fired before the story ends. For that reason, I believe the world should prepare for a less optimistic outcome.

Nickel prices rose during Monday’s trading as the US dollar weakened against most major currencies, while markets assessed developments related to US tariff policy alongside expectations of a recovery in demand.

Indonesia plans to issue production quotas ranging between 260 million and 270 million tons of nickel ore this year, according to Bloomberg. This level is slightly above earlier estimates of 250 to 260 million tons, but significantly below the 379 million ton target set for 2025. Authorities manage production levels through annual mining permits known as RKABs, with quotas subject to mid-year review.

PT Weda Bay Nickel is set to receive a quota of 12 million tons of ore this year, down from 42 million tons in 2025. The mine, located on Halmahera Island in North Maluku province, is jointly owned by Tsingshan Holding Group Co, Eramet SA, and PT Aneka Tambang. Eramet confirmed the reduced allocation and said it intends to request a review, while Indonesia’s Ministry of Energy and Mineral Resources said quotas remain under evaluation.

Price stabilization

Indonesia is seeking to curb a persistent global surplus after its production surged to around 65% of global supply, a development that has pushed prices lower over the past two years and forced higher-cost producers in Australia and New Caledonia to shut down.

The quota reduction will have a major impact on the Weda Bay mine, which had planned to raise output to more than 60 million tons of ore to support a nearby industrial complex. Instead, the mine has imported significant volumes of ore from the Philippines to offset local supply shortages.

Nickel is used in stainless steel production and electric vehicle batteries, although demand from the battery sector has been weaker than expected as some manufacturers shift toward chemistries that do not rely on nickel.

In January, Macquarie Group raised its 2026 nickel price forecast by 18% to $17,750 per ton on the London Metal Exchange, citing a sharp decline in the expected surplus due to tighter Indonesian quotas.

Coal production cuts

Indonesia is also working to reduce thermal coal output, with mining quotas in the world’s largest coal exporter set to decline by about 25% compared with the previous year. The Indonesian Coal Mining Association said these cuts could force some operations to close and leave overseas buyers searching for alternative supplies.

Meanwhile, the dollar index fell by 0.2% to 97.6 points by 15:57 GMT, recording a session high of 97.8 and a low of 97.3.

In trading, spot nickel contracts were up 1% at $17,300 per ton at 16:13 GMT.