Oil Drops on Expectations of an Iran Deal, Yen Rises – Asia Market Wrap

Oil fell and Treasuries rose after Trump said fresh US-Iran talks would begin Monday, boosting optimism the two sides will reach a deal to reopen the Strait of Hormuz.

Brent for October slid as much as 7.3% to $81.55 a barrel after Trump said he’d agreed to call off a massive attack on Iran as allies in the Middle East, including Saudi Arabia, asked him to pursue a deal instead.

Treasuries rose across the curve as oil’s decline eased inflation concerns, with the benchmark 10-year yield dropping 4 bps to 4.69% after rising to the highest since January 2025 last week. Gold climbed 0.5% to about $4,070 an ounce. Futures contracts for the Nasdaq 100 and European shares advanced 0.9%, while Asian stocks fell as South Korean chipmakers tumbled.

The Yen strengthened amid speculation of more intervention after support from the US, advancing as much as 1.4% to 155.23 per Dollar with traders remaining on alert for further action after Japan and the US warned they were ready to wade into the market again following coordinated intervention last week. Bloomberg’s gauge of the Dollar fell 0.2%, with the Yen contributing the most to that move.

South Korea’s Kospi, a bellwether for AI investments, fell more than 5% after surging a record 18% on Friday. With the Nikkei 225 also slipping, the broader MSCI gauge of Asian shares lost 0.6%. Japan’s Ministry of Finance said it conducted a Yen-buying operation on July 31, US time, in coordination with the US Treasury, and wouldn’t hesitate to conduct further joint intervention.