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Forex•21 May 2026•

1 min read

Oil Dips Support Yen as Traders Await Koeda and Warsh Commentary

Key Facts

1Crude oil prices retreated amid growing hopes for the reopening of the Strait of Hormuz, impacting energy-linked currency movements.

2Markets are awaiting commentary from central bank officials, including Koeda from the BoJ and Kevin Warsh from the Federal Reserve.

Crude oil prices retreated in recent sessions amid growing hopes for the reopening of the Strait of Hormuz, directly impacting energy-linked currency movements. According to reports, markets are now awaiting key commentary from central bank officials, including Koeda from the Bank of Japan and Kevin Warsh from the Federal Reserve, to determine the next direction for the USD/JPY pair.

This decline in oil prices reduces the geopolitical risk premium, supporting the Japanese Yen as Japan is a major energy importer. Per market data, U.S. Retail Sales showed a 0.5% growth in May, bolstering the Dollar Index (DXY) against major peers, while traders assess how Warsh's anticipated policies might influence the interest rate trajectory.

Looking at available data, the USD/JPY pair faces heightened volatility as developments in the Strait of Hormuz remain under watch. On the economic front, markets are eyeing a series of Fed speeches, including those by Bowman and Williams scheduled for May 14 per the economic calendar, which may provide clearer insight into the future of U.S. monetary tightening.