USD/JPY Gains 0.16% to 158.70 on Safe-Haven Flows

The USD/JPY currency pair traded around 158.70 on Tuesday, marking a modest gain of 0.16 percent for the day, as the US dollar held firm amid geopolitical tensions in the Middle East and mixed economic signals from both the United States and Japan.

The dollar's strength stemmed largely from safe-haven demand, with the US Dollar Index, which tracks the greenback against a basket of major currencies, stabilizing near 99.30 after retreating from an intraday high of 99.50. Escalating conflicts in the region continued to fuel investor caution, though some market participants expressed optimism over potential de-escalation. Reports indicated that US officials had paused certain military actions against Iranian infrastructure for five days, prompting a brief recovery in risk assets like S&P 500 futures, which turned positive around 6,600 during European trading. This shift tempered early dollar gains, with USD/JPY briefly dipping to 158.50 before flattening.

In the US, preliminary S&P Global Purchasing Managers' Index data for March underscored a slowdown in economic activity. The composite PMI fell to 51.4 from 51.9 in February, its lowest reading in 11 months, while the services PMI...