US and Japan Team Up to Support Weakened Yen Amid Oil Price Plunge

The US and Japan have intervened in currency markets to support the yen, which has been weakening due to low interest rates. On Monday, August 3, oil prices plummeted by over 6% as news of talks with Iran broke out, adding uncertainty to the market.

Futures on major stock indices, including the S&P 500 and Nasdaq, rose by 0.4% and 0.6%, respectively, but Japan's Nikkei fell by 1% and South Korea's KOSPI dropped 3.6%. The MSCI broad Asia-Pacific ex-Japan stock index also fell 1% in early trading.

The yen rose over 1% to nearly 155.39 per US dollar, prompting expectations of further interventions from regulators. Analysts noted that the joint intervention is unlikely to change the long-term trend of yen depreciation but may provide near-term support for the currency.