The USD/JPY pair is trading with a neutral tone near 159.70 on Tuesday, up 0.27%, as markets react to a dramatic escalation in geopolitical tensions following headlines that the United States (US) has moved to effectively shut down traffic through the Strait of Hormuz.

The Hormuz blockade has placed the Bank of Japan in one of its sharpest policy binds in recent memory. The same energy shock that is strengthening the dollar and pushing USD/JPY toward 160 is also stoking the inflation that may compel the BOJ to raise rates — yet tightening into a growth shock …

The Pound Sterling remains firm on Monday as talks between Iran and the US disappointed investors, triggering a reaction from the White House, while recent news suggested that Tehran could be considering abandoning uranium enrichment, a key condition set by the US to end the war.

The opening gap above 1.3850 has been pushed back from 1.3875~

Early gains are giving way to consolidation

NZD/USD moves lower at the start of the week and trades around 0.5830 on Monday at the time of writing, down 0.15% on the day after the failure of negotiations between the United States (US) and Iran over the weekend.

Early gains are giving way to consolidation

United Overseas Bank (UOB) economists Quek Ser Leang and Lee Sue Ann notes that USD/JPY has surged on the open after a quiet Friday, with short-term momentum now strong enough to challenge the 160.00 handle, though 160.50 is seen as tough resistance.

The opening gap higher has been pushed back from resistance at congestion around 99.00 and the 99.18 high of 8 April

The opening gap lower has bounced from congestion support at 0.7000