The correlation between dollar-yen and Brent crude rose to its highest level since late 2021 a day before Japanese authorities intervened in the currency market, underscoring the tighter link between oil prices and the yen.

While the wide interest-rate gap between the US and Japan has long been cited as a key factor behind yen weakness, the recent surge in oil prices tied to Middle East tensions is seen as another important driver. As a major energy importer, Japan is highly exposed to crude price swings, which feed directly into its trade balance and currency.