Oil Prices Plummet as Hopes of Peace Deal with Iran Surge
Oil prices plummeted on Monday as hopes of a peace deal in the Middle East surged. The Brent crude futures sank over 6% to $82.41 after US President Donald Trump announced that talks with Iran would take place on Monday.
Trump had earlier called off an imminent attack on Iran, opting instead for negotiations to reopen the Strait of Hormuz and resolve the impasse over Tehran's nuclear capabilities.
The yen, meanwhile, experienced a sudden spike after the US and Japan confirmed joint intervention to prop up the currency. The Japanese finance ministry stated that the goal was not to reverse the long-term trend of dollar-yen appreciation, but rather to stabilize the market in the short term.
Mizuho Bank strategist Masayuki Nakajima noted that structural forces remain broadly yen-negative, citing persistent US-Japan interest-rate differentials. However, he also suggested that the momentum may shift in favor of yen appreciation due to recent communication between the two countries.