Meanwhile. oil prices tumbled after US President Donald Trump said he had agreed to halt a large-scale strike on Iran, following requests from West Asian allies, including Saudi Arabia, to give diplomacy a chance instead.
Brent crude for October delivery sank as much as 7.3% to $81.55 a barrel, while West Texas Intermediate fell 4.6% to $80.76. Brent recovered slightly from lows, now trading around $84. A modest output increase agreed by key OPEC+ producers also added to the pressure on crude.
The retreat in oil follows a build-up of tension over recent days, during which Washington had threatened to strike Iran hard to bring an end to a conflict now stretching into its sixth month.
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Fuel costs have climbed sharply on supply disruptions from the standoff, fanning concerns about a fresh inflation surge and rattling equity, bond and currency markets worldwide.
Bloomberg cited a Telegram post from Iranian Foreign Minister Abbas Araghchi on Sunday August 2, saying talks between Iran and Oman had entered their final stages. The two nations bordering the strait are negotiating a new route through it, though the discussions do not touch on whether the strait itself will stay open or shut, according to Araghchi’s spokesman Esmail Baghaei, who spoke to Iranian state television.
The Japanese yen weakened 0.2% to 157.70 per dollar, with traders on high alert for fresh coordinated intervention by Japan and the US on Monday, after joint operations in Tokyo and New York last week had sparked a sharp rebound in the currency.
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Japan’s Ministry of Finance said it had carried out a yen-buying operation on July 31, working with the US Treasury Department, and signalled it would step in again if needed.
Trump told reporters on Sunday, that the move was a “signal of friendship,” while Treasury Secretary Scott Bessent said Washington had acted to counter “disorderly” swings in the yen and stood ready to keep assisting Tokyo.
Elsewhere, US equity futures pointed to a firmer open, with S&P 500 contracts up 0.4% as of 9.06 am Tokyo time and Nasdaq 100 contracts advancing 0.5%.
Hang Seng futures were little changed. The offshore yuan held steady at 6.7490 per dollar.
