Peso up on yen intervention, Middle East peace deal hopes

The peso surged back to the PHP 60-per-dollar level on Monday after the Japanese yen recovered following joint intervention from Japanese and United States regulators, and amid easing tensions in the Middle East.

The currency jumped by 31 centavos to close at PHP 60.93 versus the greenback from its PHP 61.24 finish on Friday, data from the Bankers Association of the Philippines’ website showed.

This was its best close in over six weeks or since it finished at PHP 60.775 a dollar on June 19.

The local unit opened the session sharply stronger at PHP 61 per dollar. It traded better than Friday’s finish throughout the day as its worst showing was at just PHP 61.08, while its intraday best was at PHP 60.87 against the greenback.

Dollars exchanged went down to USD 1.448 billion from USD 1.555 billion previously.

“The peso closed [stronger], breaking the PHP 61-per-dollar figure, tracking regional currencies led by the Japanese yen following joint intervention by the BoJ (Bank of Japan) and the US,” a trader said in a phone interview.

News of the resumption of peace talks between the US and Iran also led to a weaker dollar, the trader said.

The peso was supported by easing inflationary pressures due to the decline in global crude oil prices amid hopes for a Middle East peace deal, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Tuesday, the trader sees the peso ranging from PHP 60.70 to PHP 61.10 against the dollar, while Mr. Ricafort expects it to move between PHP 60.80 and PHP 61.05.

Oil prices fell sharply on Monday as hopes of a peace deal in the Middle East grew, while the yen firmed to a three-month high after the US and Japan confirmed joint intervention to support the weak currency, Reuters reported.

Brent crude futures sank USD 4.50, more than 5%, to USD 83.40 a barrel after US President Donald J. Trump said talks with Iran will happen on Monday. He had earlier called off an attack on Iran to pursue a deal to reopen the Strait of Hormuz.

The Japanese yen strengthened over 0.5% to JPY 156.70 per US dollar after a sudden move earlier in the day to its strongest since early May of JPY 55.2, putting traders on alert for another bout of intervention.

Japan and the US conducted coordinated yen-buying intervention and will not hesitate to take further action, Japan’s finance ministry said on Monday, confirming a rare bilateral action to halt the yen’s slide to 40-year lows.

US Treasury Secretary Scott Bessent also said the United States would consider increasing in coming months the size of the Federal Reserve’s repurchase facility providing temporary dollar liquidity, calling the tool an “important backstop.”

Mr. Trump said on Sunday the United States was helping Japan prop up the yen as a sign of friendship and to help the world economy.

The yen had been rooted near 40-year lows of JPY 163.99 per US dollar in recent weeks before the latest interventions, with net short positions on the yen of roughly USD 12.5 billion, the highest in two years, data from a US regulator showed. — Aaron Michael C. Sy with Reuters