Yen Falls Amid Risk-on Mood

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Monday, as European stocks traded multi-week higher amid continued optimism around the trajectory of talks to end the Iran war.

A potential peace deal between the U.S. and Iran is likely to see a permanent end to the Middle East conflict after senior U.S. officials indicated over the weekend that both countries were nearing an agreement that could reopen the Strait of Hormuz. Both sides are reportedly still negotiating key terms of the peace deal, and final approval from both sides is expected to take several days. Secretary of State Marco Rubio claimed the U.S. and Iran have made "some progress" in negotiations to end the war.

Though the peace proposal has narrowed some of the gaps between the two countries, one of the sticking points seems to be Iran's efforts to establish a tolling system for the Strait of Hormuz, which Rubio called "unacceptable" and said "would make a diplomatic deal unfeasible."

Oil prices fell nearly 6 percent, helping ease inflationary concerns after reports emerged that the U.S. is close to reaching a deal with Iran that would end the three-month-old war, reopen the Strait of Hormuz and see Iran give up its stockpile of highly enriched uranium.

However, the JPY bears may refrain from making bold bets due to intervention suspicions.

In the European trading today, the yen fell to a 1-month low of 203.37 against the Swiss franc and a 2-week low of 214.42 against the pound, from early highs of 203.04 and 214.05, respectively. If the yen extends its downtrend, it is likely to find support around 204.00 against the franc and 215.00 against the pound.

Against the euro and the Australian dollar, the yen fell to 6-day lows of 185.09 and 113.93 from early highs of 184.85 and 113.70, respectively. The yen is likely to find support around 186.00 against the euro and 115.00 against the aussie.

The yen edged down to 159.04 against the U.S. dollar, from an early 5-day high of 158.76. The next support level for the yen is seen around the 160.00 region.

Looking ahead, Canada wholesale sales data for April is due to be released in the New York session.

The U.S., U.K. and several key markets in Europe are closed for public holidays.