Oil prices fell sharply after an initial deal between the United States and Iran raised expectations that restrictions on Iranian crude exports could ease. Analysts said there is no immediate sign that existing sanctions on Chinese companies tied to Iran-related business will be lifted. They added that, in theory, new purchases of Iranian oil would not trigger new sanctions, shifting supply-demand expectations toward looser conditions.

The yen has moved back above 160 to the US dollar, nearing a level that could trigger fresh intervention after a major government operation about a month earlier. Japan holds more than US$1.3 trillion in foreign exchange reserves, but repeated interventions would become costlier and less effective. The author argues the yen’s fundamentals are weakening as Japan’s high debt limits rate hikes and its trade position deteriorates amid higher energy import costs and rising defence spending, increasing near-term depreciation risks.