BANGKOK (AP) — World shares were mixed Monday after the U.S. and Japan confirmed they had acted to prop up the value of the Japanese yen against the U.S. dollar.
Oil prices fell sharply, meanwhile, after U.S. President Donald Trump said he would order U.S. forces to refrain from attacks against Iran, claiming a deal to end the fighting in the Middle East was close. Just a day earlier, the president had said he was “losing faith” in the negotiations with Iran, warning that the U.S. military “will be hitting them very hard.”
The dollar dipped to near 155.20 yen after Trump and Japanese officials confirmed they had intervened last week to curb the U.S. currency’s rise to 40-year highs against the yen. Last week it was trading near 164 yen.
By late Monday in Tokyo, a dollar bought 156.68 yen.
A weak yen helps to boost the profits of Japanese companies with big operations overseas, increasing their value in yen terms. It also has drawn millions of foreign tourists who have enjoyed their strong purchasing power in Japan.
But a cheap currency also weakens Japan's purchasing power overall, pushing up costs for the imports of oil and other essential goods.
The dollar's value has surged as it serves as a safe haven for investors in times of uncertainty, such as during war. Trump lauded the dollar's strength in comments to reporters, but a weaker dollar can help make U.S. exports more competitive.
The U.S. Treasury bought yen through the Federal Reserve Bank of New York, analysts said, to help boost its value.
It's a strong signal, said Stephen Innes of SPI Asset Management.
“Washington is no longer merely giving Tokyo permission to defend the yen. It is prepared to stand on the same side of the trade,” he said in a commentary.
The euro fell to $1.1527 from $1.1549.
In European markets, Germany's DAX gained 1.3% to 25,963.51, while the CAC 40 in Paris climbed 1% to 8,596.56. Britain's FTSE 100 was nearly unchanged, at 10,861.95.
The future for the S&P 500 was up 0.5% and that for the Dow Jones Industrial Average rose 0.6%.
In Asian trading, Japan's Nikkei 225 index lost 0.9% to 63,754.90, while the Kospi in South Korea dropped 5.1% to 6,257.45.
The Kospi soared 17.9% on Friday for its best day in history after losing even more of its value earlier in the week. The index is dominated by two tech giants, Samsung Electronics and SK Hynix, both of whose shares gained more than 25% on Friday. Shares in both companies fell 8.8% on Monday.
Hong Kong's Hang Seng index picked up 0.5% to 26,009.40 and the Shanghai Composite index lost 0.6% to 3,809.66.
In Australia, the S&P/ASX 200 gained 0.2% to 8,996.90.
Taiwan's Taiex gained 0.6%, while the Sensex in India advanced 0.8%.
The lull in fighting in the Middle East helped pull Brent crude, the international standard, 4.7% lower to $83.92 per barrel. U.S. benchmark crude lost 5.6% to $79.89 per barrel.
On Friday, U.S. stocks rose to finish a wild July for Wall Street.
The S&P 500 climbed 0.7% and the Dow industrials added 0.5%. The Nasdaq composite rallied 1%.
Markets have lurched up and down as oil prices shot higher because of the war with Iran. Growing worries over whether Big Tech’s massive investments in artificial-intelligence technology will translate into profits and whether chipmaker stocks have soared too high in the euphoria around AI have also buffeted share prices.
Friday’s gains sent the S&P 500 to its first winning week in three.
Amazon led the market with a leap of 15.3% after reporting much stronger profit for the latest quarter than analysts expected. Its profit more than tripled from a year earlier, thanks in part to an acceleration of growth in its cloud computing business.
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Associated Press reporters Mayuko Ono and Mari Yamaguchi in Tokyo contributed to this report.
