USD/JPY, Oil Pairs Shift as Trump Halts Iran Attack on Saudi/UAE Request

Geopolitical risk premiums are poised to recede after President Trump announced the cancellation of a planned military strike against Iran, following direct requests from Saudi Arabia's Crown Prince and the UAE President to allow diplomatic negotiations to proceed. The decision removes an imminent escalation trigger that had been supporting safe-haven flows into JPY and CHF while boosting crude oil prices. USD/JPY is expected to see upward pressure as risk appetite improves and yen safe-haven demand diminishes. Oil-sensitive currencies such as CAD and NOK may face headwinds as crude prices pull back on reduced supply disruption fears, while commodity-linked pairs like USD/CAD could see the USD strengthen against the loonie. The Iranian conflict de-escalation also eases pressure on USD/IRR and broader emerging market currencies in the region. Traders should monitor upcoming developments in the Saudi/UAE-mediated negotiations, as any breakdown could rapidly re-ignite risk-off sentiment. Key levels to watch include USD/JPY resistance near recent highs and Brent crude support zones around pre-escalation levels.