The yen traded mixed against G-10 and Asian currencies in early markets, with analysts warning that rising oil prices could pressure Japan's trade balance. The currency's performance reflects broader concerns about energy costs and their impact on the world's third-largest economy.

Japan, which imports nearly all its oil, faces a worsening trade deficit as crude prices climb. Higher energy costs could offset gains from a weaker yen's boost to exports, creating a complex dynamic for policymakers. The Bank of Japan is already navigating negative interest rates and yield curve control.

Market participants are watching for signs of sustained yen weakness, which could prompt intervention from Japanese authorities. The currency's trajectory will likely depend on oil price movements and global risk sentiment. Traders are positioning for potential volatility as energy markets remain volatile.