# Yen on Watch, Trump: Talks Are Iran's Last Chance

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 4 Aug 2026, 14 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/405f13c1-6445-4a09-ac02-b49c0002ab2a/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. The yen held steady through the New York trading session on Monday, after a sharp advance earlier in the day that sparked speculation authorities may have intervened to support the currency again after last week's coordinated action between the US and Japan. Meantime, US and Japanese officials warned investors they're determined to keep defending the yen after jolting currency markets with their first joint intervention in 15 years. Bloomberg's Shery Ahn spoke to Shusuke Yamada, Chief Japan FX and Rates Strategist at BofA Global Research. Plus - President Donald Trump said his latest offer of talks is a "last chance" for Iran after he called off what he said was a major attack on the Islamic Republic. Iran denied it was negotiating with the US, but said talks with Oman to get more ships moving through the Strait of Hormuz are making progress. Bloomberg's Shery Ahn spoke to Mona Yacoubian, CSIS Director and Middle East Program Senior Adviser. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
[0:11] Speaker 2: Welcome to the Daybreak Asia podcast. I'm Dan Schwartzman. Doug
[0:14] Speaker 2: Chrisner has a week off. We begin with the yen.
[0:17] Speaker 2: The currency held steady through the New York trading session
[0:20] Speaker 2: on Monday, after sharp advance earlier in the day that
[0:23] Speaker 2: spark speculation authorities may have intervened to support the currency again. Meantime,
[0:27] Speaker 2: US and Japanese officials warned investors they're determined to keep
[0:31] Speaker 2: defending the currency after their first joint intervention in fifteen years.
[0:35] Speaker 2: That's where we begin our conversation with shus Ke Yamada.
[0:38] Speaker 2: Shooske is chief Japan and FX rate strategistic Bank of
[0:42] Speaker 2: America Global Research. He spoke to Bloomberg's s Sherry on,
[0:45] Speaker 2: I mean.
[0:45] Speaker 1: It's exciting few days just following the Japanese yen. Is
[0:49] Speaker 1: there space for authorities to do more?
[0:52] Speaker 2: Yes?
[0:52] Speaker 3: I think this time the authorities are determined to really
[0:57] Speaker 3: break one hundred and fifty five, the key level. You know,
[1:00] Speaker 3: if they fail this time to break that level, then
[1:04] Speaker 3: I think the market will see, you know, the authorities
[1:08] Speaker 3: have exhausted policy options. So the fact that they started
[1:14] Speaker 3: this intervention means They're strongly determined to alter the market
[1:20] Speaker 3: demand supply balance, and I think that change will happen
[1:25] Speaker 3: once you know, one hundred and fifty five is broken.
[1:28] Speaker 3: And also it's a coordinated interventional.
[1:31] Speaker 1: I was gonna say, I mean, aren't the stakes higher
[1:33] Speaker 1: now that the US has got involved. You have joint
[1:36] Speaker 1: intervention for the first time in fifteen years or so.
[1:39] Speaker 3: Exactly, So the cost of failure is pretty big this time.
[1:42] Speaker 3: And that's why I think we have to assume they
[1:46] Speaker 3: are determined to do, you know, whatever it takes to
[1:50] Speaker 3: change the market dynamics, and coordinate intervention really removes the
[1:56] Speaker 3: hard limit on intervention associated with uniratal intervention, that is
[2:03] Speaker 3: the balance of foreign reserves.
[2:05] Speaker 1: Japan has now to mention that you can also have
[2:08] Speaker 1: that fit tool where you can borrow as much as
[2:10] Speaker 1: what's sixty billion dollars a day without selling treasuries, as
[2:12] Speaker 1: that sort of lessen the burden on token also relations
[2:16] Speaker 1: with Washington.
[2:18] Speaker 3: Yeah exactly. So you know, we don't know how this
[2:20] Speaker 3: will be used in practice, but I think the market
[2:24] Speaker 3: now knows Japan is willing to use this facility. The
[2:28] Speaker 3: US is willing to, you know, let Japan use this facility,
[2:32] Speaker 3: And you know, the biggest, one of the biggest, you know,
[2:35] Speaker 3: the side effects of intervention is that Japan might have
[2:39] Speaker 3: to sell a large amount of US treasuries and that
[2:42] Speaker 3: could destabilize the bond market in the US, which could
[2:47] Speaker 3: also spill over to Japan as well. So I think,
[2:50] Speaker 3: you know, this facility definitely helps, And yeah, I think
[2:56] Speaker 3: Japan can probably do more than otherwise.
[2:59] Speaker 1: Why use euro which is speculated right now, instead of
[3:02] Speaker 1: the US dollar? If the US actually went ahead and
[3:05] Speaker 1: did that, was it trying to not to weaken the
[3:08] Speaker 1: green back? And what are the implications of this?
[3:11] Speaker 3: That's a very good question. I don't fully know the background,
[3:17] Speaker 3: but maybe you know, the US would not want to
[3:20] Speaker 3: sell US dollar, But I think maybe a bigger implication
[3:25] Speaker 3: could be that, you know, it could be a coordinated
[3:28] Speaker 3: effort across Japan, US and maybe you know, broader G
[3:34] Speaker 3: seven community, because you know the fact that US selling
[3:37] Speaker 3: euro implies Europe might have been noted in you know,
[3:43] Speaker 3: given a notice in advance.
[3:45] Speaker 1: So yeah, I mean, how much pressure does this put
[3:48] Speaker 1: on bog government when you have the United States who's
[3:52] Speaker 1: also in the past said that monetary policy should be
[3:56] Speaker 1: let alone in a way, implying that they actually need
[3:59] Speaker 1: to hike at this Yes.
[4:00] Speaker 3: So the BOJ is a key factor, right, So one
[4:03] Speaker 3: argument is that stronger end reduced its pressure of the BOJ.
[4:08] Speaker 3: But I think, you know, the argument should go the
[4:12] Speaker 3: other way, because short term maybe they will succeed, but
[4:15] Speaker 3: longer term, it is true intervention is not effective because
[4:19] Speaker 3: they cannot you know, continue indefinitely, right, and this is
[4:23] Speaker 3: a coordinated effort. When you ask someone to join your project,
[4:27] Speaker 3: you have to have a goal, and that goal cannot
[4:29] Speaker 3: be just to buy time, right, You have to have
[4:33] Speaker 3: a long term goal and a long term plan. So
[4:36] Speaker 3: I think Japan should have a more comprehensive policy respond
[4:41] Speaker 3: beyond FCS intervention. And as you said, Secretary best And
[4:45] Speaker 3: has historically argued that BOJ rate hikes are needed and
[4:50] Speaker 3: effective to support the Japanese yen.
[4:53] Speaker 1: And yet is that possible to have such coordinated and
[4:57] Speaker 1: long term strategic planning here in Japan when you have
[4:59] Speaker 1: an gustration like primates Attaka each is that wants to
[5:02] Speaker 1: see expansionary policy.
[5:04] Speaker 3: Yeah, so I think that's why longer term success is
[5:10] Speaker 3: much more uncertain than short term. So here, you know,
[5:16] Speaker 3: what they need is faster bios, your rate hikes, maybe
[5:20] Speaker 3: more balanced physical policy, but again it's not your natural
[5:27] Speaker 3: action by Japan itself. You have to you know, you
[5:31] Speaker 3: also have this repo facility announcement, So it seems like
[5:35] Speaker 3: this whole move has been well prepared, and from that perspective,
[5:41] Speaker 3: I think there's a stronger case that Japan will respond
[5:45] Speaker 3: in a more comprehensive manner than otherwise.
[5:47] Speaker 1: Is that why you think your urine target for the
[5:50] Speaker 1: yen is still low one fifties?
[5:52] Speaker 3: Well, my argument so we changed our verys in view
[5:56] Speaker 3: in May to a constructive one, and our argument is that, uh,
[6:00] Speaker 3: you know, the bounance of payment has been improving, you know,
[6:03] Speaker 3: quite a lot for Japan for the Japanese yen over
[6:06] Speaker 3: the past year, and uh you know that that should
[6:10] Speaker 3: prevail once you know, the market recognizes that dynamics. And
[6:16] Speaker 3: I also think there's a little bit of a gap
[6:18] Speaker 3: between the actual uh you know, uh factor behind the
[6:23] Speaker 3: young weakness and uh the market's view. Actually, I think,
[6:27] Speaker 3: you know, the rights in Japanese equity over the past
[6:30] Speaker 3: year and a half has led to a lot of
[6:33] Speaker 3: equity related in selling hedging by foreign investors. So it's
[6:37] Speaker 3: not just policy risks that have, you know, driven the
[6:41] Speaker 3: young weakness.
[6:42] Speaker 2: That was shoes Ki Yama, Dad Chief Japan and FX
[6:44] Speaker 2: rate strategist at Bank of America, speaking of Bloomberg TV
[6:47] Speaker 2: host sherry On, and we're bringing their conversation to you
[6:50] Speaker 2: here on the Daybreak Asia Podcast. Welcome back to the
[7:01] Speaker 2: Daybreak Asia Podcast. I'm Dan Schwartzman. Doug Krisner has a
[7:04] Speaker 2: week off. President Trump says this is Iran's last chance
[7:07] Speaker 2: to sign a deal. That is after he called off
[7:10] Speaker 2: a major attack on the Islamic Republic over the weekend.
[7:12] Speaker 2: Iran denied it was negotiating with the US, but said
[7:15] Speaker 2: talks with Oman to get more ships moving through the
[7:17] Speaker 2: straighth Hormuz are making progress. That's where we begin our
[7:21] Speaker 2: conversation with Mona Yakubian. Mona's a director and senior Advisor
[7:24] Speaker 2: of the Middle East Program at CSIS. She spoke to
[7:27] Speaker 2: Bloomberg scherry.
[7:28] Speaker 1: On, can you just help all of us understand where
[7:30] Speaker 1: we are at in this conflict.
[7:34] Speaker 4: You know, it's a dizzying turn of events. We really
[7:37] Speaker 4: are seeing a cycle of escalation, military escalation, announced potential
[7:46] Speaker 4: breakthroughs in diplomacy which then don't materialize, and then a
[7:50] Speaker 4: return back to the threats, and that's exactly what we've
[7:54] Speaker 4: witnessed over the weekend, where we saw first some very
[7:57] Speaker 4: significant threats being leveled against Iran by President Trump, threatening
[8:02] Speaker 4: to go after major energy infrastructure in Iran, but then
[8:08] Speaker 4: he calls the strikes off again at the last minute,
[8:12] Speaker 4: saying that there could be a diplomatic breakthrough. Iran then
[8:15] Speaker 4: denies that they are having direct talks, and now we're
[8:19] Speaker 4: hearing again an escalation, at least in the President's rhetoric. Unfortunately,
[8:24] Speaker 4: this has become an all too familiar cycle with respect
[8:27] Speaker 4: to this conflict.
[8:30] Speaker 1: Why is the President not moving through and following through
[8:34] Speaker 1: on his threats? Is a call just way too high,
[8:36] Speaker 1: especially at a time when Iran is actually ready to
[8:40] Speaker 1: take the hit.
[8:44] Speaker 4: I think that the President has certainly been receiving many
[8:47] Speaker 4: calls from Golf allies and partners who raise deep concerns
[8:52] Speaker 4: about what Iran would do if the US struck in
[8:56] Speaker 4: massive strikes against Iran's energy infrastructure. It's fairly clear that
[9:01] Speaker 4: Iran would not hesitate to retaliate, hitting American companies, Gulf
[9:08] Speaker 4: infrastructure installations, energy installations all across the region, and therefore
[9:13] Speaker 4: I think this is why you keep seeing the President
[9:16] Speaker 4: walk up to the brink of those threats but not
[9:19] Speaker 4: following through on them. Every time he does it. Though, however,
[9:23] Speaker 4: I think Iran takes away the message that the US
[9:27] Speaker 4: is weak and that Iran has the upper hand in
[9:29] Speaker 4: this conflict.
[9:31] Speaker 1: The upper hand on fundamentally different objectives out of this war, right,
[9:36] Speaker 1: especially when it comes to what happens to the Straight
[9:38] Speaker 1: of four moves? Can the international community accept what Tehran wants,
[9:43] Speaker 1: which is control of the waterway?
[9:48] Speaker 4: Well, I think Iran de facto has control over the
[9:51] Speaker 4: Straight of hour moves. I don't see a return to
[9:54] Speaker 4: the status quo anti And so the question is what
[9:57] Speaker 4: is the way forward? Is there some sort of compromise
[10:00] Speaker 4: and you know, what is Iran willing to accept? What
[10:05] Speaker 4: would some kind of an agreed upon channel or passage
[10:09] Speaker 4: to the Strait look like? There has been discussion about
[10:13] Speaker 4: potentially modeling it after the Strait of Malica and how
[10:15] Speaker 4: that is administered, But it seems fairly clear that Iran
[10:20] Speaker 4: is not willing to relinquish its control and it would
[10:23] Speaker 4: be very hard to compel it to do so. Militarily,
[10:28] Speaker 4: It would come, I think, at great risk to US
[10:32] Speaker 4: forces in the region.
[10:35] Speaker 1: Beyond this immediate conflict around the Iran What precedent does
[10:40] Speaker 1: this said on the global stage, especially about the US
[10:44] Speaker 1: as an international actor and a mediator of sorts when
[10:47] Speaker 1: it comes to global peace.
[10:51] Speaker 4: Well, I think it raises questions about US credibility and reliability.
[10:57] Speaker 4: In particular, when we see these dramatic swings from promises
[11:03] Speaker 4: of diplomatic breakthroughs to very significant threats of military action,
[11:09] Speaker 4: it comes off both to adversaries and allies alike that
[11:14] Speaker 4: the US is not a reliable partner in the case
[11:19] Speaker 4: of allies and in the case of adversaries, that the
[11:23] Speaker 4: US doesn't make good on its threats. And so really
[11:27] Speaker 4: it's a loss to US credibility on both sides, and
[11:31] Speaker 4: it does raise bigger questions about US leadership across the globe.
[11:38] Speaker 1: So, in the meantime, is this in the area of
[11:40] Speaker 1: groundhog day with the Iran war getting to the brink
[11:44] Speaker 1: of more strikes to pulling back, going to see be
[11:47] Speaker 1: the new normal? And in that case, how would really
[11:51] Speaker 1: powers around the world behave around this, especially given that
[11:55] Speaker 1: the price of oil is on the line.
[12:00] Speaker 4: Well, if there is a resumption of even limited strikes,
[12:02] Speaker 4: we were seeing. The strait has remained for all intents
[12:05] Speaker 4: and purposes closed. There's limited shipping that's going through, but
[12:08] Speaker 4: very little. If there is a resumption of even limited
[12:12] Speaker 4: strikes or in a more regular fashion, unfortunately, that spells
[12:16] Speaker 4: real trouble for global energy supply and supply chains. And
[12:22] Speaker 4: how much longer this level of disruption in the Strait
[12:28] Speaker 4: of Hormuz can be tolerated is honestly an open question,
[12:32] Speaker 4: and I think this is certainly on the President's mind.
[12:35] Speaker 4: He raised the prospect at the time of the signing
[12:38] Speaker 4: of the MoU that he didn't want to be responsible
[12:41] Speaker 4: for a global recession, and so that looms out there
[12:44] Speaker 4: as well in his own decision making, and I think
[12:48] Speaker 4: that is certainly a factor in his decisions and not
[12:51] Speaker 4: to follow through on threats to go after Iran's energy
[12:54] Speaker 4: infrastructure for fear that it really will unleash chaos not
[12:59] Speaker 4: only across the East, but across the global economy.
[13:03] Speaker 2: That was Mona Yakubian, director and Senior Advisor of the
[13:06] Speaker 2: Middle East Program at csis speaking to Bloomberg TV host
[13:09] Speaker 2: Cherry On and we're bringing their conversation to you here
[13:12] Speaker 2: on the Daybreak Asia Podcast.
[13:16] Speaker 3: Thanks for listening to today's episode of the Bloomberg Daybreak
[13:19] Speaker 3: Asia Edition podcast. Each weekday, we look at the story
[13:23] Speaker 3: shaping markets, finance, and geopolitics in the Asia Pacific.
[13:27] Speaker 2: You can find us on Apple, Spotify, the Bloomberg Podcast
[13:30] Speaker 2: YouTube channel, or anywhere else you listen.
[13:33] Speaker 3: Join us again tomorrow for insight on the market moves
[13:36] Speaker 3: from Hong Kong to Singapore and Australia. I'm Doug Prisner,
[13:41] Speaker 3: and this is Bloomberg

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