The Japanese yen rose in the Asian market on Wednesday against a basket of major and minor currencies as part of recovery attempts from a one-week low against the U.S. dollar. The yen benefited from a slowdown in the American currency following President Trump's announcement to extend the ceasefire with Iran indefinitely.

The probability of the Bank of Japan (BoJ) raising interest rates during its April meeting remains weak, especially after Governor Kazuo Ueda refrained from pledging to normalize monetary policy in the near term due to the impact of the Iranian war on economic forecasts.

Price Overview

- Japanese Yen Exchange Rate Today: The dollar fell against the yen by 0.1% to (159.17¥), from today’s opening price of (159.32¥), and recorded a high of (159.42¥).

- The yen ended Tuesday's trading down by 0.3% against the dollar, its second consecutive daily loss, reaching a one-week low of 159.64 yen after Iran refused to participate in the second round of peace negotiations in Pakistan.

The U.S. Dollar

The dollar index fell on Wednesday by 0.1%, retreating from a high of 98.57 points, reflecting a slowdown in the levels of the American currency against a basket of global currencies.

Beyond correction and profit-taking, the U.S. dollar is declining due to a slowdown in safe-haven buying as markets welcomed Trump's decision to extend the ceasefire with Iran.

Regarding monetary policy, the statements of Federal Reserve nominee Kevin Warsh during a Senate hearing were interpreted as leaning toward a hawkish stance, while strong retail sales data provided an optimistic outlook for the U.S. economy's performance during the first quarter of this year.

Iranian War Updates

- U.S. President Donald Trump announced the extension of the ceasefire with Iran indefinitely.

- Pakistan, the mediator in the peace talks, requested the ceasefire extension.

- Trump: "We will extend the ceasefire until Iran presents its proposal and discussions conclude one way or another."

- Iranian state television announced that Tehran will not commit to the truce extension announced by Trump.

- Advisor to the Speaker of the Iranian Parliament: "Trump's extension of the ceasefire is an attempt to gain time for a surprise strike."

Japanese Interest Rates

- BoJ Governor Kazuo Ueda has recently refrained from pledging to raise interest rates in April, given the war's impact on economic projections.

- The market pricing for the probability of the Bank of Japan raising interest rates by a quarter percentage point in April is currently stable around 10%.

- To re-price these probabilities, investors await further data on inflation, unemployment, and wages in Japan.

Kevin Warsh, chosen by President Donald Trump to succeed Federal Reserve Chair Jerome Powell, has presented a broad and provocative vision for change within the central bank. His plan includes a comprehensive restructuring of its operations, policies, and communication style with the markets.

His most prominent ideas—as expressed in previous statements and speeches—include what he describes as a "regime change" in monetary policy, cutting interest rates, shrinking the Fed's balance sheet, and redefining the central bank's role to be more focused and less expansive in its mandates.

"Regime Change" in monetary policy

In a July 2025 interview with CNBC, Warsh stated that "the way monetary policy is managed has been broken for a long time," adding that the current central bank is radically different from the one he joined in 2006.

He emphasized: "We need a regime change at the Fed... We do not need to continue the policies that led to the biggest macroeconomic error in 45 years, which caused division in the country and high inflation."

Cutting rates and shrinking the balance sheet

In other remarks to Fox Business, he stated simply: "Interest rates should be lower."

He also wrote in a Wall Street Journal op-ed that reducing the central bank's massive balance sheet could allow for lower interest rates and support households and small-to-medium-sized businesses.

A different vision for inflation

During a lecture at the International Monetary Fund (IMF), Warsh criticized what he described as intellectual errors that contributed to high inflation, arguing that some economic models were unrealistic and that massive fiscal policies were a primary cause of the recent inflationary wave, rather than just external shocks like the pandemic or the war in Ukraine.

He also predicted that artificial intelligence could lead to a structural decline in prices in the coming years.

Downsizing the central bank's role

Warsh believes the Fed must significantly shrink its balance sheet, considering it "several trillion larger than it should be," and that this inflation in the balance sheet has led to market distortions.

Fed independence and a narrower focus

Despite his strong support for central bank independence, Warsh stressed that this independence must focus on one primary goal: price stability.

He said that "the more the Fed expands its talk on issues outside its scope, the greater the risks to its ability to achieve economic stability."

Reducing "noise" within the Fed

He criticized the frequency of statements issued by central bank officials, considering them to cause "message chaos," and called for a reduction in what he described as "verbal contradictions" within the institution.

He also pointed to the need for improved coordination between the Fed and the Treasury Department regarding fiscal policies and the bond market, without compromising the independence of monetary decisions.

The image of a nominee with a broad change agenda

Warsh's statements show that he adopts a more aggressive approach to restructuring the central bank, combining rate cuts, balance sheet reduction, institutional role redefinition, and a tightened focus on fighting inflation—all part of what he himself described as a "radical reform" of how the Fed functions.

Today's hearing

Federal Reserve Chair nominee Kevin Warsh called for a “radical system change” within the U.S. central bank, including a new framework for controlling inflation and a reshaping of how the Fed communicates with the public regarding monetary policy.

During his confirmation hearing before the Senate Banking Committee, Warsh held the central bank responsible for the inflationary wave that followed the COVID-19 pandemic, which still affects American households.

Warsh said that “the fatal political errors of the past four or five years” still have lingering effects, noting that the Fed needs a “systemic change in managing monetary policy,” including a “new and different framework for inflation.”

He added that the Fed's method of communicating with markets and the public “exacerbated the problem,” hinting at the possibility of adjusting the quarterly economic forecast mechanism and the interest rate path.

Tense hearing

The session quickly turned tense as Warsh avoided giving a direct answer to a question about whether President Donald Trump lost the 2020 election—a point Democratic Senator Elizabeth Warren considered a benchmark for testing his independence.

He also stated that he would continue with his plan to sell assets exceeding $100 million in value without providing precise details about their nature or the buyer, noting that the proceeds would be invested in “traditional and simple” assets.

When asked about Trump's pressure regarding interest rate cuts, Warsh said that “presidents tend to prefer lower rates,” adding that Trump “expresses this very publicly.”

Kevin Warsh, the nominee for Chair of the U.S. Federal Reserve, called for a “radical system change” within the American central bank, including a new framework for controlling inflation and a reshaping of how the Fed communicates monetary policy to the public.

During his confirmation hearing before the Senate Banking Committee, Warsh held the central bank responsible for the inflationary wave that followed the COVID-19 pandemic, which continues to impact American households.

Warsh stated that the “fatal political errors over the last four or five years” continue to have lingering effects, noting that the Fed requires a “systemic change in the management of monetary policy,” including a “new and different framework for inflation.”

He added that the Fed's method of communicating with markets and the public “exacerbated the problem,” hinting at potential adjustments to the mechanism of quarterly economic forecasts and interest rate paths.

A tense hearing

The session quickly turned tense as Warsh avoided giving a direct answer to a question regarding whether President Donald Trump lost the 2020 election—a point Democratic Senator Elizabeth Warren considered a benchmark for testing his independence.

He also stated that he would proceed with his plan to sell assets valued at over $100 million without providing precise details regarding their nature or to whom they would be sold, noting that the proceeds would be invested in “traditional and simple” assets.

When asked about Trump’s pressure to cut interest rates, Warsh said that “Presidents tend to prefer lower rates,” adding that Trump “expresses this very publicly.”

Fed independence and inflation

Warsh emphasized that the independence of monetary policy is “essential,” but noted that he does not see politicians expressing their views on interest rates as a direct threat to that independence.

In his speech to the committee, he said that Congress tasked the Fed with achieving price stability “without justification or hesitation,” adding that “inflation is a choice, and the Fed must take responsibility,” and that “low inflation is the primary shield for the economy.”

He also called for interest rate cuts in the future, based on the premise that artificial intelligence and technological developments could boost productivity, even though other monetary officials believe this impact does not justify an immediate rate cut.

Political disagreement and timing uncertainty

These developments come amid ongoing tension between Trump and the current Fed Chair, Jerome Powell, whose contract officially ends on May 15, though the possibility of him remaining exists if a replacement’s appointment is delayed.

The timing of the Senate vote remains unclear amid sharp political division. Republican Senator Thom Tillis pledged to delay the vote until the Justice Department’s investigation into Powell is completed.

An unprecedented institutional crisis also looms, as the absence of a confirmed successor could lead to Powell’s continuation or the appointment of temporary leadership, within a complex Federal Reserve system that includes a central board, regional banks, tens of thousands of employees, and broad mandates ranging from monetary policy to banking supervision.

This situation represents one of the most sensitive phases in the history of the U.S. central bank, with growing debate over its independence and its dual role in the economy and politics.

Copper prices moved within a narrow range on Tuesday as investors awaited potential outcomes regarding peace talks between the United States and Iran, while also following the Federal Reserve Chair confirmation hearing that could provide significant indicators regarding the path of interest rates.

Benchmark three-month copper on the London Metal Exchange (LME) rose 0.1% to $13,288 per metric ton, after ending the previous session down 0.5%.

The United States had expressed confidence in the possibility of holding talks with Iran, while a senior Iranian official indicated that Tehran is considering participation; however, significant obstacles remain as the ceasefire deadline approaches.

Brokerage Sucden Financial stated that the lack of a clear market direction reflects investors waiting for clearer signals from macro-economic and geopolitical developments.

At the same time, the dollar index rose by 0.1%, making dollar-denominated metals more expensive for holders of other currencies, which typically pressures demand.

Investors are also focusing on the Senate hearing for Federal Reserve Chair nominee Kevin Warsh, which may test his independence from the White House amid repeated criticisms directed by the current administration at Fed Chair Jerome Powell for his delay in cutting interest rates.

China and supply pressure the market

In China, refined copper production rose to a monthly record high in March, indicating a lack of production cuts despite smelters' pledges last year to reduce output by 10% to counter declining treatment charges.

Mixed movements for other metals

In other metal markets:

* Aluminum rose 0.3% to $3,568 per ton amid continued concerns regarding supplies from the Gulf region.

* Zinc jumped 1.1% to $3,447.50, supported by hedging operations from investors closing short positions.

* Lead increased 0.4% to $1,981.

* Tin rose 0.7% to $51,040.

* Nickel climbed 0.2% to $18,290.

Broker Marex noted that net long positions on zinc reached their highest levels since the second quarter of 2024.

In a notable development, nickel contract trading on the Shanghai Futures Exchange will be opened to foreign investors for the first time starting from the evening trading session in China, a move that may enhance market liquidity.