Bank of Japan hints at raising rates… Yen under pressure at 159 per dollar

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• The Japanese currency is attempting to recover from its lowest levels in five weeks.

• Japanese wage growth exceeded expectations in April.

• The yen is trading within the range of intervention by Japanese monetary authorities.

• The Governor of the Bank of Japan hinted at the need to raise interest rates.

• The US dollar continues to decline in the foreign exchange market.

The Japanese yen rose in the Asian market on Friday against a basket of global currencies, continuing its recovery from its five‑week low against the US dollar. Despite this rise, the yen is on track to incur a new weekly loss due to escalating geopolitical tensions in the Middle East.

Japanese wages: The Ministry of Labor announced on Friday that total monthly cash income and a separate set of full‑time wage figures rose 3.5% year‑on‑year in April, above the 3.2% forecast, while wages rose 3.1% in March.

Clearly, higher wages pave the way for further price increases and accelerate inflation in the near term, raising inflationary pressure on monetary policymakers at the Bank of Japan and boosting the likelihood of a rate hike in June.

The US dollar fell 0.1% on Friday, continuing its loss for the second session in a row, falling from a two‑month high, reflecting ongoing weakness against a basket of currencies. Dollar levels are falling as risk appetite improves in markets, amid investors' hopes that the US and Iran will reach a peace agreement that would end the three‑month‑old Iranian war.

Iranian war updates:

• Hezbollah leader rejects a ceasefire agreement in Lebanon.

• Hezbollah's stance casts shadows over Middle East tensions and prospects for ending the Iranian war.

• A ceasefire in Lebanon is linked to broader negotiations between the US and Iran.

• US President Donald Trump said talks with Iran are going well, hinting at progress that could yield results by the end of the week.

• Trump says he may meet Iran's Supreme Leader "if an agreement is reached."