GLOBAL MARKETS: Oil prices drop as hopes rise for Iran deal

SINGAPORE — Oil prices tumbled while global stock markets traded mixed on Monday as investors welcomed renewed hopes for peace in the Middle East. Meanwhile, the Japanese yen surged after the United States and Japan confirmed a rare coordinated intervention to support the weakening Japanese currency.

Brent crude futures fell more than 6% to $82.41 per barrel after U.S. President Donald Trump announced that talks with Iran would take place on Monday. Trump had earlier canceled a planned military strike on Iran to pursue a diplomatic agreement aimed at reopening the Strait of Hormuz and resolving concerns over Tehran's nuclear program.

U.S. stock futures moved higher, with S&P 500 futures gaining 0.4% and Nasdaq futures rising 0.6%. In Asia, however, markets were weaker. Japan's Nikkei index fell 1%, while South Korea's KOSPI dropped 3.6% following a volatile July that saw the benchmark lose 22%.

The broader MSCI Asia-Pacific index excluding Japan also declined 1% in early trading.

The Japanese yen strengthened by more than 1% to 155.39 against the U.S. dollar after officials confirmed that Washington and Tokyo had jointly intervened in the foreign exchange market. Japan's Finance Ministry said both countries would not hesitate to take additional action if necessary, marking a rare instance of bilateral currency intervention to halt the yen's slide to its weakest level in four decades.

Masayuki Nakajima, a strategist at Mizuho Bank, said the intervention was likely intended to slow the yen's rapid decline rather than reverse its long-term weakness, which continues to be driven by the wide interest-rate gap between the United States and Japan.

He said that while the broader trend still favors a weaker yen, recent communication between the U.S. and Japan could discourage speculative trading and provide short-term support for the Japanese currency.

Before the intervention was officially confirmed, Trump said on Sunday that the United States was helping Japan strengthen the yen as a gesture of friendship and to support the global economy.

"They have a weakening yen, and they wanted a little bit of help. And we're always there for Japan," Trump told reporters.

Nick Twidale, chief market strategist at ATFX Global, said Trump's comments suggesting the move was based on friendship rather than economic fundamentals could weaken the credibility of the U.S. involvement.

Twidale said the intervention was working against market fundamentals and that the yen could weaken again once the intervention ends unless broader economic conditions change. -Reporting by Ankur Banerjee in Singapore; Editing by Muralikumar Anantharaman/Reuters