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Yen surges on risk aversion and stronger BoJ tightening expectations
Brent crude spiked to $97.04 intraday before easing, while markets track whether it pushes toward $100 to $102 and revives inflation and yield pressure.
Brent crude drove a key cross-asset backdrop on Wednesday, rising to an intraday high of $97.04 before retreating. The move kept inflation and yield risk elevated as renewed US-Iran escalation sustained supply and geopolitical concerns, with the focus on whether Brent can make another run toward $100 to $102.
In foreign exchange, the yen was the strongest major, reflecting both risk aversion and a more hawkish Bank of Japan narrative. The shift also followed changes in expectations about the timing and pace of Japanese tightening as investors reduced carry positions.
Action Forex reports that BoJ board member Hajime Takata described 2026 as a “regime change” and argued rate hikes should be “nimble and data-dependent,” rather than tied to fixed intervals. Takata also pointed to July producer price inflation of 7.2% as evidence of second-round inflation risks, while Governor Kazuo Ueda confirmed he met US Treasury Secretary Scott Bessent at the G20 and NHK reported Bessent told Japanese officials that Japan’s next step should be to raise interest rates.
Markets are already pricing more than a 90% probability of a September BoJ hike, so attention has turned to whether tightening accelerates after that. Action Forex also cautioned that stability in equities appears contingent on oil avoiding another sharp advance, which would quickly pressure inflation expectations, yields, and valuations.
Latest closeWTI crude $90.70 ▲0.5%|Brent $95.32 ▲0.7%