The yen gained ground in Asian trade on Tuesday on track for the first profit in four days against the dollar and moving away from recent six-week lows.

The dollar is expanding its losses in the forex market as the risk appetite rebounded after US President Donald Trump’s announcement of a ceasefire between Israel and Iran.

The cautious Bank of Japan’s policy meeting last week also hurt the odds of normalizing the monetary policy and hiking interest rates in July, as traders now await more data from the world’s third largest economy.

The Price

The USD/JPY price fell 0.6% today to 145.29, with a session-high at 146.17.

The yen lost 0.1% on Monday against the greenback, hitting a six-week trough at 148.03 amid mounting geopolitical tensions back then.

Ceasefire 

US President Donald Trump announced a ceasefire agreement between Iran and Israel, to get into effect in a few hours.

The deal, reached with Qatari help and US coordination, stipulates an Iranian ceasefire first, followed by Israel in 12 hours, then the announcement of the end of the 12-day war in 24 hours.

Trump lauded the agreement which avoided a war that would’ve destroyed the Middle East.

US Dollar

The dollar index fell 0.3% on Tuesday away from a four-week high at 99.42 against a basket of major rivals.

The dollar fell as the risk appetite improved in most global markets following the Iran-Israel ceasefire.

Later today, Fed Chair Jerome Powell is scheduled to testify ahead of the House of Parliament in Washington.

Japanese Rates

The odds of a Bank of Japan 0.25% interest rate hike in July is still below 40%.

Now investors await more inflation, unemployment, and wages data from Japan.

U.S. stock indices rose on Monday as investors closely watched for Iran’s response to the recent airstrikes targeting its nuclear facilities.

Heavy U.S. bombers struck nuclear sites in Fordow, Isfahan, and Natanz, coinciding with diplomatic efforts aimed at de-escalation and achieving a ceasefire between Tehran and Israel.

These moves followed President Donald Trump's Friday statement that he would decide within two weeks on how to respond to Iran.

Markets are increasingly concerned about the possibility of an Iranian military escalation, including potential attacks on U.S. bases or attempts to close the Strait of Hormuz.

As of 16:20 GMT, major indices showed gains:

• The Dow Jones Industrial Average rose 0.3% (up 114 points) to 42,321

• The S&P 500 climbed 0.5% (up 31 points) to 5,998

• The Nasdaq Composite increased 0.6% (up 121 points) to 19,568

Aluminum prices rose on Monday to their highest level in three months following U.S. airstrikes on Iranian nuclear facilities, sparking fears of rising energy costs and potential disruptions to metal shipments from the Middle East.

Energy accounts for 40% to 45% of the cost of aluminum smelting in some regions globally.

Investor concerns over an escalation in Middle East conflict and potential disruptions to oil and gas supply grew after U.S. President Donald Trump warned that the U.S. might target additional sites unless a peace agreement is reached with Israel.

By 09:16 GMT, benchmark aluminum was up 0.5% at $2,561 per metric ton, after touching a high of $2,654.50, its strongest level since March 21.

Alistair Munro, senior base metals analyst at brokerage Marex, said:
“Middle Eastern countries account for about 9% of global aluminum output. If the Strait of Hormuz is shut down, it could impact aluminum shipments.”

Analysts added that global supply could face more disruption if Iran closes the Strait, since Middle Eastern production relies heavily on imported raw materials like bauxite and alumina.

Copper Market Under Scrutiny on London Metals Exchange (LME)

In other metals markets, attention turned to the significant holding of cash copper contracts and warrants (ownership documents) on the LME, along with a sharp price backwardation between short- and long-term contracts.

LME data shows that a single company controls over 90% of cash copper and warrants.

The spread between cash copper and the three-month contract hit $274 per ton on Friday — the highest since October 2022 — up from just $3 a month ago.

Part of this squeeze is attributed to declining copper inventories at LME warehouses, after large volumes were shipped to the U.S. following President Trump’s order to investigate possible tariffs on copper imports, which drove U.S. prices higher.

The LME responded Friday by imposing limits on large short positions.

Other Base Metals Movements

• 3-month copper fell 0.1% to $9,619 per ton

• Lead rose 0.4% to $2,000 per ton

• Tin dropped 0.1% to $32,665 per ton

• Nickel declined 1.1% to $14,840 per ton

• Zinc, highly energy-intensive, rose 1.1% to $2,660 per ton

Bitcoin Recovers Above $101,000 After Weekend Losses

Bitcoin rebounded late Sunday, trading above $101,000 after losses over the weekend as investors reacted to joint U.S.-Israeli airstrikes targeting Iran's nuclear facilities.

Market Resilience Reflects Expectations of a Limited Conflict

Bitcoin’s rise coincided with minor movements in gold prices and muted reactions in oil and stock futures markets, indicating traders are expecting a limited conflict rather than a prolonged geopolitical shock.

The U.S. operation, coordinated with Israel, targeted Fordow, Natanz, and Isfahan using over 125 aircraft and bunker-busting munitions.

Iran Responds with Missiles and Drones; Emergency Talks in Moscow

Iran responded by launching missile and drone attacks on Israeli cities and threatened to strike U.S. bases in the Gulf. Iran’s Foreign Minister traveled to Moscow on Sunday for emergency talks, while U.S. President Donald Trump hinted at a pause on further American military actions.

A final decision on next steps may come within two weeks, with European nations urging restraint and a return to diplomacy.

Gold and Oil React Calmly

Despite the escalation, markets stabilized quickly. Gold briefly rose to $3,398/oz before slipping back to $3,374. Oil pared early gains, ending up just 0.5% for the session.

The "Kobeissi Letter" wrote on X: “Markets still anticipate a short-lived war,” noting oil prices remain well below historical levels associated with Hormuz Strait disruptions.

Crypto Markets Steady Amid Volatility

Cryptocurrencies mirrored cautious sentiment. While Bitcoin saw selling at the height of weekend tensions, traders returned as risk appetite recovered.

Pav Hundal, lead analyst at Swyftx, told Decrypt: “We saw nervous trading in the hours after the U.S. strike. Trading volumes remain high.”

He added: “If tensions ease in the Middle East, we expect renewed investor confidence, pushing prices upward.”

Uncertainty Prevails, Crypto Volatility Remains

“No one — not even Trump — knows what’s next,” Hundal said. “This uncertainty creates discomfort for traders.”

He emphasized, “Bitcoin is still an emerging asset. It’s not surprising to see markets de-risk after major events. This volatility is part of the crypto market’s nature.”

Bitcoin Dips to $98,200 After U.S. Strikes

Bitcoin fell to $98,200 on Sunday as the Middle East conflict escalated. President Trump announced strikes on three nuclear sites Saturday night, sparking global risk-off sentiment that pushed Bitcoin below the $100,000 psychological threshold.

Massive Derivatives Liquidations

According to CoinGlass, nearly 187,016 traders were liquidated in the last 24 hours, with total liquidations exceeding $656.12 million.

The largest single liquidation was a $35.45 million BTC/USDT position on HTX.

Potential Iranian Retaliation Adds Risk Pressure

Speculation about an Iranian response is adding to Bitcoin volatility, increasing the chance of wider Middle East conflict and driving risk-asset pressure.

Japanese Firm Buys the Dip

Despite turmoil, institutional interest remained strong. Japanese investment firm Metaplanet announced Monday it purchased 1,111 more BTC, bringing its total holdings to 11,111 BTC.

Bitcoin Price Outlook: Temporary Rebound Before More Downside?

The daily BTC/USDT chart shows price closing Saturday below the 50-day exponential moving average (EMA) at $102,942 and dipping to a low of $98,200 the next day.

As of Monday morning, price had recovered slightly, hovering around $101,800.

Two key scenarios emerge:

Scenario 1: Rebound Toward Resistance Zone

Price may gradually rise toward the 50-EMA at $102,968 and the Point of Control (POC) at $103,800, which saw the highest volume since April. This $102,968–$103,800 range is a major resistance zone.

Scenario 2: CME Gap Fill

Bitcoin futures on CME show a price gap between $101,705 and $103,365, likely to be "filled" before continuing its broader trend. This aligns with the aforementioned resistance levels and suggests a potential short-term bounce before resuming the downward trajectory.