04/09/2026 02:20 AST
Oil prices sank Thursday after US President Donald Trump suggested the latest American attacks against Iran would likely be short-lived. The move helped most equities higher and eased pressure on bond yields, providing much-needed relief to markets, while the yen extended gains after a spike Wednesday fueled fresh talk of intervention.
Trading floors have been jolted since US strikes on Iranian targets in the Strait of Hormuz sparked tit-for-tat exchanges between the two countries and sent crude rallying as much as 10 percent. The flare-up, which broke weeks of relative calm around the waterway - a crucial transit route for a fifth of global oil and gas - fanned fears of another step up in already elevated inflation and put pressure on central banks to raise interest rates. It also came days after a hawkish speech by Federal Reserve Chairman Kevin Warsh that investors read as a pivot toward a possible tightening of monetary policy.
Sentiment was given a boost Wednesday after Trump said the latest round of strikes could be over soon. Asked how long the bombing campaign could last, he told reporters: "I don't think too long." CNN cited US officials as saying the military escorted 40 commercial ships loaded with 18 million barrels of crude through the strait, a wartime high.
The two main contracts, Brent and West Texas Intermediate, pared their gains Wednesday and on Thursday snapped their recent rally to drop more than 1 percent. Yields on 10-year US Treasuries and Japanese government bonds of the same length both dipped.
The developments helped all three main US indexes higher, and while most of Asia followed suit in the morning, traders turned more cautious in the afternoon. Seoul, Sydney, Singapore, Manila, Mumbai, Bangkok and Jakarta all rose, but Tokyo, Hong Kong and Taipei struggled and Shanghai was flat. London edged up at the open, as did Frankfurt, while Paris was down.
Weak US economic data also provided support. August private jobs creation came in below expectations and was down from the previous month, while job openings also missed forecasts, easing pressure on the Fed to raise borrowing costs. Focus is now on Friday's closely watched non-farm payrolls figures and next week's consumer price index, which could play an outsized role in the Fed's decision-making ahead of its Sept 16 rate decision.
The soft readings "finally offered a little relief ... (and) gave the bond market a reason to stop climbing the stairs for a moment", wrote Stephen Innes at Quintex Intel. "Treasury yields eased, and stocks could finally breathe. The market is not suddenly celebrating weaker growth. It is simply rediscovering that slightly bad news may be exactly what it needs right now, especially if the alternative is a Fed that feels compelled to keep tightening into an oil shock." Still, he said Trump's comments had "taken some heat out of the worst-case inflation fears, but the geopolitical pot is still simmering".
Investors are also keeping tabs on Tokyo after a spike in the yen stoked speculation of further intervention by the authorities. The currency strengthened to 158.22 per dollar Wednesday, having sat above 160 earlier in the day. Observers said it looked as though officials had again stepped in, as the yen had been giving back the gains it enjoyed following a historic joint Japan-US intervention at the end of July. The gains also came after a top Bank of Japan (BoJ) board member suggested officials could raise rates by more than the expected 25 basis points at their meeting this month, and even announce another increase at the following gathering. - AFP
Key figures at around 0715 GMT
Tokyo - Nikkei 225: DOWN 0.2 percent at 64,214.48 (close) Hong Kong - Hang Seng Index: DOWN 0.4 percent at 25,219.86 Shanghai - Composite: FLAT at 3,942.09 (close) London - FTSE 100: UP 0.1 percent at 10,769.73 West Texas Intermediate: DOWN 1.1 percent at $90.01 per barrel Brent North Sea Crude: DOWN 1.2 percent at $94.45 per barrel Dollar/yen: DOWN at 157.18 yen from 158.89 yen on Wednesday Euro/dollar: UP at $1.1606 from $1.1584 Pound/dollar: UP at $1.3493 from $1.3484 Euro/pound: UP at 86.01 pence from 85.91 pence New York - Dow: UP 0.6 percent at 53,061.95 (close)
AFP
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