Brent Nears $100 as Yen Hits Seven-Month High

Summary

Brent crude climbed close to $100 a barrel, returning towards levels last seen in late July. The yen strengthened towards 152.89 per dollar, a seven-month high, as expectations for faster Bank of Japan rate rises drove short-covering. Asian technology stocks advanced, with SK Hynix rising more than 4%, while Japanese cable makers Fujikura and Furukawa Electric also jumped on renewed enthusiasm for data-centre investments.

Equities

The FTSE 100 closed 0.1% lower at 10,811.66 points on Tuesday, after briefly moving into positive territory earlier in the session. The FTSE 250 fell 0.64%, while gains in energy and mining shares limited the decline in London’s blue-chip index.

BP closed 0.68% higher on Tuesday and Shell gained 0.52% as Brent crude approached $99 a barrel earlier in the day. Antofagasta rose 4.7% and Glencore climbed 4.2% after copper prices reached a record high, helping the industrial metal miners sector gain 2.7%.

Dunelm tumbled 14.3% on Tuesday after the homeware retailer issued a profit warning for 2027, citing unusually hot summer weather. Smith+Nephew fell 3.6% and AstraZeneca declined 1.4%, while Computacenter closed 7.8% lower despite saying annual profit would beat market expectations. Goodwin dropped 23.2% following a report that US private equity firm Cerberus was nearing a £1 billion deal for its defence business.

In the US, the S&P 500 closed 0.58% lower at 7,673.52 points on Tuesday, while the Nasdaq fell 0.32% to 26,421.41 and the Dow Jones dropped 1.18% to 52,786.07.

Salesforce and Intuit both fell around 4% on Tuesday, while ServiceNow lost 5%. OpenAI’s launch of its GPT-6 Astra model last week renewed concerns that AI could compete more directly with services provided by specialist software companies, and the S&P 500 software and services index fell 1.4%.

Intel jumped 9% on Tuesday and Qualcomm rose 3.2% after a deal with Amazon to develop custom AI chips. Apple fell 1.2% ahead of Wednesday’s expected smartphone launch.

Energy shares also advanced as oil prices reached a six-week high. Marathon Petroleum gained 2.4% and Occidental Petroleum added 1%, while Coinbase fell 3.1% and Strategy dropped 4.4% as bitcoin retreated from $80,000.

Forex & Commodities

The US dollar was under pressure early on Wednesday, with the dollar index at 98.75, close to its lowest level in almost two weeks. Sterling traded at $1.355, while the euro was steady at $1.163.

The Japanese yen strengthened to 153.3 per US dollar, remaining close to Tuesday’s seven-month high of 152.9. The yen’s rally has been supported by expectations of faster Bank of Japan tightening and the prospect of Japanese investors bringing overseas funds home.

Traders widely expect the Bank of Japan to raise interest rates by 25 basis points at its 17–18 September meeting. Attention will be on whether Governor Kazuo Ueda signals further tightening following the decision.

Gold edged lower on Tuesday, with spot gold down 0.4% at $4,385 per ounce during afternoon US trading. The metal remained under pressure after stronger-than-expected US employment figures increased expectations of a Federal Reserve rate rise next week.

US producer price inflation is due on Thursday, followed by consumer price inflation on Friday. The figures will provide the latest reading on inflation ahead of the Federal Reserve’s policy meeting, while the European Central Bank is broadly expected to increase interest rates on Thursday.

Oil prices rose again early on Wednesday as escalating attacks across the Middle East increased concerns about disruption to regional supplies. Brent crude gained 1.3% to $99.22 a barrel, approaching $100 for the first time since July.

US West Texas Intermediate also rose 1.2% to $94.13 a barrel early on Wednesday. Brent has climbed by around a quarter since early August as hopes for a lasting resolution to the six-month conflict faded and fighting intensified.