Asian shares rise, oil slips as Trump holds off on fresh Iran strikes

Asian shares edged higher and oil prices slipped as US President Donald Trump said he is holding off on military strikes.

Brent slipped 2.7% to around $109 a barrel. Treasuries slipped slightly. Shares in Japan and Australia witnessed gains.

Equity-index futures tied to Wall Street benchmarks fluctuated in Asian trading, after the underlying gauges rebounded from session lows in choppy trading. A gauge of semiconductor stocks fell 2.5%.

Developments around a potential breakthrough in the standoff over the Strait of Hormuz have driven sharp swings in energy markets. With the waterway still effectively closed to commercial shipping and tanker traffic reduced to a trickle, investors are bracing for continued turbulence across oil and global equities.

Earlier Monday, both the US and Iran said they’d rejected fresh offers as insufficient to secure a deal. The White House said a proposal delivered by Tehran through mediators Sunday lacked meaningful improvement, Axios reported. Iran, meanwhile, indicated US demands are unacceptable.

Trump has repeatedly threatened renewed military action against Iran without following through. There was no immediate confirmation from Tehran of renewed talks. Trump said the US was prepared to attack if an acceptable deal wasn’t reached but didn’t set a deadline.

In other corners of the market, a Bloomberg gauge of the dollar held its losses from the prior session. Gold edged up to about $4,580 an ounce as the prospect of a US-Iran ceasefire deal eased some inflationary concerns that have weighed on bullion.

The yen was steady against the dollar after the country’s economy grew much faster than expected at the start of the year, supporting the case for further Bank of Japan interest-rate hikes.

Higher oil prices and inflation concerns have rattled bond markets, sending yields from Japan to the US sharply higher. Thirty-year Treasury yields hovered near the highest levels in almost three years as investors weighed fears of persistent inflation against optimism that the US and Iran may eventually reach a deal to end hostilities.

Meanwhile in stocks, Monday’s decline marked the first back-to-back drop for the S&P 500 this month, with rising government bond yields, hotter-than-expected inflation readings and elevated oil prices all combining to dent investors’ appetite.

With inputs from Bloomberg