Oil slumps on hopes of Iran deal

Brent crude futures sank more than 4% ‌to $83.88 after U.S. President Donald Trump said talks with Iran will happen on Monday. He had earlier called off an imminent attack on Iran to reach a deal to reopen the Strait of Hormuz and resolve the impasse over Tehran’s nuclear capabilities.

S&P 500 futures rose 0.5% while Nasdaq futures gained 0.8%. European futures were 0.7% higher.

Asian stocks, though, struggled at the start of the week ​after a turbulent July that saw wild swings due to worries over the AI trade as investors fretted about the massive capital spending and ​whether it will provide returns quickly enough.

Japan’s Nikkei (.N225), opens new tab dipped nearly 2%, while South Korea’s KOSPI (.KS11), opens new tab slid over 4%. MSCI’s broadest index ⁠of Asia-Pacific shares outside Japan (.MISX00000PUS), opens new tab was down about 1%.

YEN BEARS COWER AFTER JOINT INTERVENTION

The Japanese yen firmed 0.5% to 156.47 per U.S. dollar after a sudden move ​earlier in the day put traders on alert for another bout of intervention.

Japan and the U.S. conducted coordinated yen-buying intervention and will not hesitate to take further action, ​Japan’s finance ministry said on Monday, confirming a rare bilateral action to halt the yen’s slide to fresh 40-year lows.

U.S. Treasury Secretary Scott Bessent also said the United States would consider increasing in coming months the size of the Federal Reserve’s repurchase facility providing temporary dollar liquidity, calling the tool an “important backstop”.

“Bessent’s comments arguably carry more weight than the intervention itself,” said Matt ​Simpson, senior market analyst at StoneX. “It feels like a safe bet that the Japanese yen has troughed for the year. The words ‘joint intervention’ carries a lot of ​weight in these markets and is a term rarely used.”

Preceding the announcement on the joint action, Trump said on Sunday the United States was helping Japan to prop up the yen as ‌a sign ⁠of friendship and to help the world economy.

“They have a weakening yen, and they wanted a little bit of help. And we’re always there for Japan,” Trump said.

Tokyo’s solo intervention conducted between late April and early May caused only a brief yen rebound, while a rate hike in June by the Bank of Japan provided little boost, underscoring the challenge facing policymakers amid rising oil prices and a wide interest rate differential against other major economies.

The yen had been rooted near 40-year lows of ​163.99 per U.S. dollar in recent weeks ​before the latest bout of interventions, with ⁠net short positions on the yen of roughly $12.5 billion, the highest in two years, data from a U.S. regulator showed.