Dollar-yen fell back to the upper ¥157 range, while WTI crude plunged on reports of progress in US-Iran nuclear talks. The decline in long-term US yields also contributed, temporarily shifting the market's direction.
In the foreign exchange market, dollar-yen fell to around ¥157.98. Reports that both the US and Iran had made concessions over Iran's nuclear programme and frozen assets helped drive WTI crude futures sharply lower. The US 10-year Treasury yield also turned lower, weakening momentum behind dollar buying.
During the day, reports concerning Iranian attacks and movements in crude oil prices caused temporary fluctuations, and during New York trading hours, crude oil at one point fell below the psychologically important $100 level. The dollar retreated from its high against the yen, while the euro and pound also saw movement against the dollar.
As subsequent reports indicated that the US and Iran were moving closer to an agreement, the market changed direction again and crude oil prices continued to fall. With the decline in long-term US yields continuing, a narrowing of the US-Japan interest-rate differential may come into play, prompting calls for attention to both energy prices and interest-rate trends.
The current focus is on developments toward a diplomatic resolution to the US-Iran situation and the course of crude oil prices. Broad-ranging effects are expected, including impacts on Japan's import prices and trade balance.