Oil drops over 4% as yen rises after US-Japan intervention

Oil prices fell sharply and the Japanese yen surged to a three-month high on Monday, August 3, 2026, as diplomatic efforts to resolve tensions with Iran accelerated and the United States and Japan confirmed a rare joint intervention to support the currency. The moves triggered significant shifts across global financial markets, with European stocks rising while Asian shares struggled.

Brent crude futures dropped more than 4%, falling below $84 a barrel, after U.S. President Donald Trump stated that talks with Iran would occur on Monday. He had earlier called off an imminent attack, aiming instead to reach a deal to reopen the Strait of Hormuz and resolve the impasse over Iran's nuclear program. Market participants interpreted the potential for a diplomatic breakthrough as a signal that Iranian oil exports could increase, adding supply to global markets.

Simultaneously, the yen strengthened over 0.5% against the U.S. dollar, trading around 156.70, after a sudden move earlier in the day to its strongest level since early May. Japan's finance ministry confirmed that Tokyo and Washington conducted coordinated yen-buying intervention and would not hesitate to take further action to...