EUR/JPY declines to near 184.00 on Middle East conflict escalation
Oleh Lallalit Srijandorn
Tarikh Diterbitkan: 23 Mar 2026 | Tarikh Diubah: 23 Mar 2026
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The EUR/JPY cross trades with mild losses near 184.15 during the early Asian session on Monday. The Japanese Yen (JPY) strengthens against the Euro (EUR) as the escalation of conflict in the Middle East boosts safe-haven assets.
- EUR/JPY posts modest losses around 184.15 in Monday’s early Asian session.
- Iran warned it will completely close the Strait of Hormuz if the US bombs power plants, boosting safe-haven flows.
- Japan’s Mimura said the government is considering taking measures on all fronts in foreign exchange volatility.
The EUR/JPY cross trades with mild losses near 184.15 during the early Asian session on Monday. The Japanese Yen (JPY) strengthens against the Euro (EUR) as the escalation of conflict in the Middle East boosts safe-haven assets.
Iran’s Islamic Revolutionary Guard Corps (IRGC) said on Monday that Iran will completely close the Strait of Hormuz if US President Donald Trump acts on threats to target the power plant. This statement came as Trump gave Iran 48 hours to reopen the Strait of Hormuz to shipping or face the destruction of its energy infrastructure. Signs of a prolonged conflict in the Middle East could boost the JPY and act as a headwind for the cross in the near term.
Furthermore, verbal interventions from Japanese authorities might contribute to the JPY’s upside. Japan’s top foreign exchange official, Atsushi Mimura, said on Monday that the government is prepared to take measures on all fronts in foreign exchange volatility.
The European Central Bank (ECB) policymakers are scheduled to speak later on Monday. Any hawkish comments from ECB policymakers could lift the EUR against the JPY. The attention will shift to Japan’s National Consumer Price Index (CPI) inflation report for February, which will be released on Tuesday.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
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