Yen hits seven-month high as oil nears $100, copper sets record

The Japanese yen climbed to a fresh seven-month high against the U.S. dollar on Tuesday, strengthening to as much as 153.53 per dollar as traders unwound short positions and ramped up bets on a Bank of Japan rate hike later this month. The move extended the yen's nearly 4% gain from around 160 per dollar early last week, while oil prices hovered near $100 a barrel and copper set new records, sending ripples across global markets.reuters

Oil Prices Test $100 on U.S.-Iran Escalation

Brent crude futures rose for a third straight day on Tuesday, gaining to around $97.20 a barrel after the U.S. military struck three Iranian oil tankers on Saturday and Iran launched ballistic missiles at two Navy warships. Iran's Foreign Ministry denounced the attacks on commercial vessels as a "war crime" and an act of "economic warfare". Brent briefly topped $98 a barrel during thin holiday trading on Monday, and Forbes reported the benchmark had neared the $100 mark last observed in late July.forbes+2

The tit-for-tat strikes have embedded a steep geopolitical risk premium into crude markets, with WTI futures also advancing above $92 a barrel. Goldman Sachs The Goldman Sachs Group, Inc. ↗ 0.55% responded by raising its Brent and WTI price forecasts by $5 each on Monday. In Pakistan, the government hiked petrol prices by Rs12.9 per litre on Monday, citing global oil market volatility.cnbc+1

Central Banks Add to the Turbulence

Markets have fully priced in a 25-basis-point BOJ rate hike at the September 17–18 meeting, with some analysts warning of a potentially larger move. Japan's real wages rose 2.4% year-on-year in July, the strongest increase since May 2021, reinforcing expectations that the BOJ will lift its benchmark from the current 1%. A Reuters poll found a majority of economists now expect the hike, which would mark the shortest interval between rate increases under Governor Ueda.Bloomberg+2

Meanwhile, the European Central Bank is widely expected to raise its deposit rate by a quarter point to 2.50% at its September 10 meeting, according to all 65 economists in a Reuters survey. ING's global head of macro, Carsten Brzeski, called it "another insurance rate hike".reuters+2

Copper Records and Multi-Asset Stress

Copper prices hit a fresh record on the London Metal Exchange on Monday, with the three-month benchmark contract rising 0.8% to $14,533 a tonne amid speculation that the Trump administration could impose new tariffs on copper imports. The metal has been on a sustained climb driven by constrained supply from Chile and rising demand tied to electrification.brusselstimes+1

The convergence of surging commodity prices, hawkish central banks, and geopolitical risk has left traders scrambling to reposition. As one maritime intelligence firm noted, "commercial tankers are now being deliberately used as instruments of reciprocal economic pressure," blurring the line between military confrontation and commercial shipping.tribune