USD/JPY Holds Near 163.00 as Trump's Iran Threats Lift Yields

U.S. Treasury yields ticked modestly higher following aggressive rhetoric from President Trump regarding Iran, with the 2-year yield rising 2.19 basis points to 4.282% and the 10-year climbing 1.2 basis points to 4.640%. Trump stated that Iran will pay a big price and will not be allowed to obtain a nuclear weapon, adding that Americans are not against war and that Iran will be held accountable. The comments inject fresh geopolitical uncertainty into markets, supporting safe-haven demand and pushing yields higher on potential inflationary implications from rising energy costs. Trump also acknowledged that Americans do not want higher gas prices, signaling awareness of the domestic economic impact. The rising yield environment is supportive for the U.S. dollar, particularly against the Japanese yen, where the wide interest rate differential continues to favor USD/JPY upside. Traders should closely monitor further developments in U.S.-Iran relations, as any military escalation could trigger significant volatility across forex and commodity markets.