Yen intervention and Middle East optimism

Currency markets paused as the Japan — Japanese yen firmed following recent joint intervention by the United States and Japan to support the currency. Treasury Secretary Scott Bessent pledged the U.S. would do 'whatever it takes' to support Japan's efforts, and expressed confidence in Japan — Bank of Japan Governor Kazuo Ueda. This heightened expectations that the BOJ could raise interest rates at its September 17-18 policy meeting. Meanwhile, the U.S. dollar index held near six-week lows as optimism over a potential diplomatic resolution to the Iran conflict weighed on oil prices, with Brent Crude falling 5% in the previous session. Qatari and U.S. officials indicated progress in mediation efforts, easing fears of supply disruptions through the Strait of Hormuz. Lower oil prices prompted traders to reprice expectations for a United States — Federal Reserve rate hike in September, with odds falling to 60% from 75% a week earlier. Attention is shifting to U.S. non-farm payrolls data due Friday.