US-Japan Intervention Boosts Yen as Oil Prices Plummet on Iran Peace Hopes
Oil prices plummeted over 4% on Monday to $83.88 per barrel as US President Donald Trump announced that talks with Iran would take place, reviving hopes of a Middle East peace deal.
The sudden drop in oil prices led to a rise in stocks, with S&P 500 futures up 0.5% and Nasdaq futures gaining 0.8%. European futures were also higher by 0.7%, but Asian stocks struggled at the start of the week, with Japan's Nikkei dipping nearly 2% and South Korea's KOSPI sliding over 4%.
The Japanese yen firmed up 0.5% to 156.47 per US dollar after a joint intervention by Japan and the US to prop up the currency. The two countries confirmed that they would conduct coordinated yen-buying interventions and take further action if necessary, according to Japan's finance ministry.
US Treasury Secretary Scott Bessent stated that the United States would consider increasing the size of the Federal Reserve's repurchase facility providing temporary dollar liquidity in coming months.