• USD/JPY inches towards April high as Japanese Yen loses safe-haven appeal amidst easing Middle East tensions.
• Geopolitical risks have not gone away completely, new Omicron variant an outside threat. 
• Friday is likely to be a big day for USD/JPY with the BoJ meeting and US PCE inflation data. 

The USD/JPY inches back up towards the April highs at 154.79 on Monday after a de-escalation in Middle East tensions reduces safe-haven flows to the Japanese Yen (JPY). This affects the JPY more than the US Dollar (USD), despite both holding safe-haven status.

The conflict between Israel and Iran has not escalated in the way markets feared. After Israel’s one-off attack on a military base outside Isfahan on Friday, Iran has not counter-attacked. As a major safe-haven, the JPY has seen demand fall and continues its long-term trend of depreciating against USD