Oil at Six-Week High as US-Iran Conflict Deepens

Bank of Japan officials added to the bank's hawkish tone. Governor Ueda said the bank wants to continue raising rates given still accommodative conditions. He stressed the need to carefully weigh the cumulative impact of five hikes already delivered. Finance Minister Katayama said Japan is monitoring debt markets with a high sense of urgency following a rise in JGB yields. Board member Takata, a known hawkish dissenter, warned that rising overseas rates could push Japan's neutral rate above current market expectations. He flagged energy prices as a risk to inflation overshooting target. The hawkish tone aligns with the outlook from Japan's recent PPI data, as covered in Japan PPI Keeps BOJ on Track for September Hike.

The yen weakened against the dollar. USD/JPY rose. The dollar advanced broadly across major currency pairs.

The Reserve Bank of New Zealand raised its cash rate as expected. The bank said further increases remain likely if energy-driven inflation pressures continue to firm. The New Zealand dollar fell and underperformed other major currencies.

Australia's second quarter GDP rose more than anticipated. The data kept focus on the likelihood of additional Reserve Bank of Australia tightening.

Japanese and South Korean shares fell sharply. Analysts pointed to rising oil prices and bond yields as the principal drivers of the selloff.