Brent crude oil breached the $100 per barrel mark for the first time since 2023 on Friday, as the continued closure of the Strait of Hormuz — through which roughly 20% of global oil supply passes — showed no signs of resolution entering its third week.
The price shock is reverberating across currency markets, with implications that cut across major pairs and commodity-linked currencies.
Safe Havens Benefit, Commodity Currencies Suffer
The Swiss franc extended its dominant performance to a fifth consecutive week, with USD/CHF sliding to 0.8820 as investors sought the franc's traditional safe-haven properties. Gold similarly held above $3,400 per troy ounce.
Meanwhile, commodity-linked currencies that would normally benefit from higher oil — such as the Canadian dollar and Norwegian krone — faced conflicting forces. Although Canada exports oil, the risk-off sentiment and fears of a global growth slowdown outweighed the commodity-price tailwind. AUD/USD fell below 0.6350 as risk appetite deteriorated.
Impact on Japan
Japan imports nearly all of its crude oil, making it one of the most exposed economies to sustained high energy prices. The BoJ's revised inflation forecast of 2.8% already incorporates elevated energy assumptions; a further prolonged Hormuz disruption could push that figure higher, complicating the BOJ's path forward.
The Ministry of Finance is reportedly preparing emergency energy-cost mitigation measures, and government subsidies for electricity and gas could be extended through year-end.