Market News

• Summary

• Bessent comments on yen adds to pressure on BOJ to hike rates
• Dollar firms as investors raise bets U.S. rate hike in September
• Renewed Gulf attacks push bond yields, oil prices higher
• Steep bond selloff keeps sentiment fragile

Sept 1 (Reuters) — The U.S. dollar strengthened on Tuesday as renewed attacks in the Gulf triggered a global bond selloff and heightened inflation concerns, while the Japanese yen weakened beyond 160 per dollar despite growing pressure on the Bank of Japan to raise interest rates.

Key Points

• Bessent's comments on the yen add to pressure on the Bank of Japan to raise rates.
• The U.S. dollar strengthened as investors increased bets on a September U.S. interest-rate hike.
• Renewed Gulf attacks pushed oil prices and bond yields higher.
• A steep global bond selloff kept broader market sentiment fragile.

Renewed Gulf Attacks Drive Oil Higher

U.S. President Donald Trump threatened further strikes against Iran following the first exchange of direct attacks in a month.

The renewed escalation pushed Brent crude futures above $91 a barrel, intensifying concerns that higher energy prices could add to inflationary pressures.

Those inflation concerns contributed to a selloff in government bonds, sending yields higher.

Dollar Strengthens

The dollar gained as investors reassessed the outlook for U.S. interest rates amid renewed inflation concerns.

According to the Reuters summary, investors increased bets on a U.S. interest-rate hike in September, providing additional support for the dollar.

Yen Slides Beyond 160

The yen weakened past 160 per dollar again, even as pressure mounted on the Bank of Japan to raise interest rates.

Comments from U.S. Treasury Secretary Scott Bessent concerning the yen added to the pressure on the BOJ to tighten monetary policy.