The Japanese yen is consolidating against major G-10 and Asian currencies amid ongoing U.S.-Iran tensions, with analysts warning of potential further weakness. The dollar trades at 159.69 yen while the euro sits at 184.33 yen and the Australian dollar at 110.46 yen, according to LSEG data. Middle East uncertainty and firmer crude oil prices are providing support for the USD/JPY pair.

Nomura's FX Research team notes that USD/JPY remains elevated in the 159s, driven by persistent geopolitical risks and higher oil prices. The analysts suggest that unless tensions ease and oil prices correct significantly, upward pressure on the pair is likely to continue. This could potentially test Japan's willingness to intervene in the foreign-exchange market to support its currency.

The yen's weakness reflects broader market concerns about regional stability and its impact on global energy markets. With crude oil prices remaining elevated, the pressure on the yen is expected to persist unless there is a clear de-escalation in Middle East tensions. Investors are closely monitoring the situation as it could trigger Japanese intervention to prevent excessive currency depreciation.