Trump's Iran Talks Send Oil Prices Plummeting as Yen Surges on Joint Intervention

Oil prices plummeted on Monday after US President Donald Trump announced that talks with Iran would happen as planned, despite his earlier threat to launch a military strike against the country. The Brent crude futures sank more than 6% to $82.41, while the yen spiked sharply after the US and Japan confirmed joint intervention to prop up the currency.

The sudden move in the yen's value was attributed to the coordinated effort between the two countries, with Japan's finance ministry stating that they would not hesitate to take further action if necessary. Mizuho Bank strategist Masayuki Nakajima noted that while the yen's depreciation trend remains intact, the recent intervention may lead to a short-term appreciation of the currency.

The market reaction was mixed, with S&P 500 futures rising 0.4% and Nasdaq futures gaining 0.6%, but Japan's Nikkei dipped 1% and South Korea's KOSPI slid 3.6%. The MSCI's broadest index of Asia-Pacific shares outside Japan was down 1% in early trading.

Nick Twidale, chief market strategist at ATFX Global, expressed skepticism about the US participation in the yen intervention, calling it a 'friendship trade' that would eventually be corrected by the market. He noted that the underlying factors driving the yen's depreciation remain unchanged.