Oil Slides on Iran Talks as Yen Surges Following Joint Intervention

Brent crude futures retreated to $83.88 per barrel after U.S. President Donald Trump signaled that talks with Iran were imminent. The shift in tone followed the president’s decision to call off a planned strike, aiming instead to secure the Strait of Hormuz and address Tehran’s nuclear program. This cooling of geopolitical friction boosted sentiment in equity markets, with S&P 500 and Nasdaq futures climbing 0.6% and 0.8% respectively.

In the currency markets, the yen reached 155.2 per dollar, its strongest level since early May. Japan’s finance ministry confirmed the intervention was a joint effort with the U.S., a rare move intended to reverse a decline that had pushed the yen toward 40-year lows. U.S. Treasury Secretary Scott Bessent bolstered the effort by suggesting an expansion of the Federal Reserve’s repurchase facility to provide necessary liquidity.

Market analysts suggest the weight of this bilateral cooperation marks a significant turning point. Matt Simpson of StoneX noted that the yen has likely reached its floor for the year, given the rarity and symbolic power of joint intervention. Despite previous solo attempts by Tokyo and a minor rate hike by the Bank of Japan, the currency had remained under intense pressure, with net short positions recently hitting $12.5 billion. The 2-year Japanese government bond yield responded by hitting 1.545%, the highest level since 1995, as investors recalibrated their expectations for further monetary policy normalization.