The Japanese yen strengthened in Asian trading on Monday against a basket of major and minor currencies, moving further away from its six-week lows against the US dollar as bargain buying emerged and market sentiment improved following the announcement of a framework agreement between the United States and Iran aimed at ending the conflict in the Middle East.

Later today, the Bank of Japan will begin its fourth monetary policy meeting of 2026, with policy decisions due on Tuesday. Markets widely expect the central bank to raise interest rates by 25 basis points to 1.0%, which would mark the highest level since 1995.

The Price

• Japanese yen exchange rate today: The dollar fell about 0.3% against the yen to ¥159.73, down from Friday's closing level of ¥160.19, after reaching an intraday high of ¥160.23.

• The yen ended Friday down 0.2% against the dollar, resuming losses that had paused the previous day as part of a recovery from a six-week low of ¥160.60.

US dollar

The US Dollar Index fell 0.4% on Monday, hitting a two-week low of 99.42 and reflecting broad weakness in the US currency against a basket of global peers.

Risk sentiment improved across global markets after US and Iranian officials announced agreement on a framework to end the conflict, lift the US blockade on Iran, and reopen the Strait of Hormuz.

Global oil prices

Oil prices dropped more than 4% on Monday, extending losses for a third consecutive session and falling to their lowest levels in three months as concerns about supply disruptions from the Middle East eased following the reopening of the Strait of Hormuz.

Developments in the Iran conflict

• The United States and Iran reached a preliminary agreement to end the conflict, with a formal signing expected on Friday in Geneva.

• President Donald Trump confirmed the deal and announced the lifting of the naval blockade on Iranian ports, alongside the reopening of the Strait of Hormuz to global shipping traffic.

• Pakistani Prime Minister Shehbaz Sharif, described as the key mediator, said the agreement includes an immediate and permanent ceasefire across all fronts, including the Lebanese front.

• Mediators have set Friday, June 19, 2026, as the date for the official signing ceremony between US and Iranian delegations in Switzerland.

• Under the draft agreement, Tehran has pledged not to pursue nuclear weapons and will accept strict inspection measures.

• Iran's Mehr News Agency reported that the memorandum of understanding includes 60 days of negotiations on the nuclear issue and calls for the release of $24 billion in frozen Iranian assets during the talks.

Bank of Japan

The Bank of Japan begins its fourth monetary policy meeting of 2026 later today, with a decision expected on Tuesday. Markets anticipate a 25-basis-point rate increase to 1.0%, the highest level since 1995.

Such a move would bring the Bank of Japan more in line with other major central banks that have adopted a more hawkish stance, including the European Central Bank, which raised interest rates last week.

Investors will also be looking for additional guidance on whether the central bank intends to continue raising rates in the coming months to address inflationary pressures linked to the Middle East conflict.

Responding to calls from President Donald Trump, major technology companies have begun building dedicated power plants alongside their new data center campuses to supply their own electricity needs independently.

The Trump administration argues that this approach will help shield consumers from sharp increases in electricity prices as data center expansion accelerates. However, energy experts warn that the outcome could be exactly the opposite.

As the rapid growth of artificial intelligence fuels an explosion in the number and size of data centers, electricity demand has surged dramatically. A report published by Business Insider in June estimated that if all data centers approved through 2025 become operational, they could consume between 224.3 and 358.8 terawatt-hours of electricity annually, representing an increase of as much as 50% compared with the previous year.

For comparison, that level of electricity consumption is roughly equivalent to Mexico's entire annual power usage, despite the country having a population of more than 130 million people.

Until now, data centers have relied almost entirely on local power grids, contributing to significant increases in energy costs for nearby consumers due to the sudden jump in demand.

"We are witnessing a massive transfer of wealth from residential electricity customers to large corporations, including data centers, utility companies, and their parent firms that profit from building additional energy infrastructure," said David Lapp, Maryland's People's Counsel, last year.

"The utility regulatory system is failing to protect residential consumers, which is worsening the energy affordability crisis," he added.

In response, lawmakers from both the Republican and Democratic parties have increased pressure on technology companies to bear the cost of their own energy needs.

Political pressure, combined with lengthy wait times for grid connections, has also pushed major technology firms to develop independent energy sources. While some projects rely on clean energy or hybrid systems combining natural gas with renewables, most of the new projects are powered primarily by natural gas.

The unintended consequence

At first glance, private power generation appears likely to reduce pressure on public grids and protect consumers from higher electricity costs. In practice, however, the effect can be the opposite when data centers rely heavily on natural gas, as most current projects do.

According to a report by Utility Dive, natural gas is a globally traded commodity. As data centers consume massive volumes of gas, they inevitably compete with other consumers, driving prices higher.

As a result, households could face rising heating and electricity bills at the same time.

The growth of decentralized power generation dedicated to data centers could also create what some experts describe as a "shadow grid" operating outside the regulatory framework that governs traditional utilities.

The report noted that a data center with its own gas-fired power plant contracts directly with gas suppliers rather than public utility companies, placing gas pricing outside the oversight of state regulators.

An unfair energy bill

These facilities can also leverage their scale to secure large-volume, long-term gas contracts, as seen in states such as Texas, Pennsylvania, and New Mexico. This allows them to obtain lower gas prices while potentially pushing costs higher for other consumers.

Concerns extend beyond pricing. Experts warn that the emerging "shadow grid" could become a significant source of greenhouse gas emissions that are not subject to the same regulatory scrutiny as traditional power generation.

Critics argue that the Trump administration's approach misses a major opportunity to encourage technology giants to invest in upgrading and expanding America's aging and increasingly strained electricity infrastructure.

Such investments would also benefit the technology companies themselves, as long waiting periods for grid connections have become one of the biggest obstacles to artificial intelligence expansion.

Experts contend that if large technology companies were required to shoulder a significant share of the cost of modernizing the power grid, it could help reduce energy prices for consumers while maintaining stronger oversight of energy production and emissions—delivering benefits for both households and the environment.

The S&P 500 and Dow Jones Industrial Average posted modest gains in choppy trading on Friday, supported by expectations of a near-term peace agreement in the Middle East, while investors prepared for the market debut of Elon Musk's SpaceX, which is expected to become the largest public offering in Wall Street history.

Investor sentiment improved after President Donald Trump said on Thursday that an agreement to end the Middle East conflict and reopen the strategically important Strait of Hormuz could be signed as early as this weekend, although Tehran has stressed that a final decision has yet to be made.

SpaceX shares are expected to begin trading on the Nasdaq later today, with the company projected to immediately become the seventh-largest publicly traded US company by market value, carrying a potential valuation of $1.75 trillion.

Only around 3% to 4% of the company's shares are expected to be freely tradable, while Reuters reported that demand for the IPO exceeded available shares by roughly four times.

"An industry-dominating company worth $1.77 trillion doesn't enter the market quietly—it pulls liquidity away from the rest of the market," said Joel Shulman, chief executive of ERShares, which manages a fund with exposure to SpaceX.

Shares of other space-related companies, which had rallied ahead of the listing, retreated in early Friday trading. Rocket Lab fell 5.4%, Intuitive Machines declined 8.3%, and Planet Labs lost 6.6%. In contrast, funds holding SpaceX shares, including Fundrise Innovation Fund, gained 3.4%.

Eight of the eleven major sectors within the S&P 500 advanced, led by the materials sector.

Meanwhile, the Philadelphia Semiconductor Index slipped 0.3% as chip stocks lost some momentum following a strong rebound in the previous session.

Shares of Broadcom, Micron Technology, and Marvell Technology fell between 1% and 2.5%.

Analysts believe part of the weakness in US equities and Bitcoin's 16% decline last week was driven by investors reducing positions ahead of the SpaceX offering.

"In the absence of new capital flowing into the market, it's mathematically inevitable that an offering of this size will affect other companies," Shulman said.

US equity funds recorded their first weekly outflows in three weeks, while the US technology sector officially entered correction territory earlier this week.

As of 9:32 a.m. Eastern Time, the Dow Jones Industrial Average rose 303.74 points, or 0.60%, to 51,152.85. The S&P 500 gained 13.30 points, or 0.18%, to 7,407.60, while the Nasdaq Composite slipped 25.38 points, or 0.10%, to 25,784.28.

All three major US indexes were on track to finish the week with limited changes as uncertainty surrounding the Iran conflict persisted, alongside concerns that the powerful rally in artificial intelligence stocks may have become overstretched.

SpaceX, which also includes Starlink and xAI, has already broken several traditional Wall Street conventions. Index providers including Nasdaq and FTSE Russell modified listing requirements to facilitate the company's inclusion, while SpaceX set its share price at $135 even before beginning its roadshow, highlighting Elon Musk's considerable influence over the offering process.

Despite the excitement surrounding the IPO, some analysts have warned about the company's financial fundamentals after it reported annual losses exceeding $4 billion last year.

Data released earlier this week also showed inflationary pressures continuing to build due to higher energy costs linked to the Middle East conflict.

Oil prices fell below $90 per barrel following Trump's remarks, while traders pushed expectations for a Federal Reserve rate hike back to December from October, according to the FedWatch tool.

Among individual stocks, Adobe fell 8.6% after the departure of Chief Financial Officer Dan Durn.

Advancing stocks outnumbered decliners by a ratio of 2.06-to-1 on the New York Stock Exchange and 1.36-to-1 on the Nasdaq.

The S&P 500 recorded 20 new 52-week highs and two new lows, while the Nasdaq registered 78 new highs and 20 new lows.

Copper prices rose on Friday, supported by hopes that the United States and Iran could sign a peace agreement over the weekend, easing concerns about rising inflation and slowing global economic growth.

The benchmark three-month copper contract on the London Metal Exchange gained 1.2% to $13,650 per metric ton during official trading, ending a two-day decline that had pushed the metal to its lowest level in three weeks.

Copper prices had fallen on Thursday amid one of the sharpest escalations between the United States and Iran since the two sides agreed to a ceasefire in April.

A Western source told Reuters that a memorandum of understanding between the United States and Iran aimed at ending the Gulf conflict could be signed as early as Sunday.

"I've lost count of how many times we've heard about peace agreements, but the market is at least trying to build some optimism around this deal, and hopefully this time will be different," said Ole Hansen, Head of Commodity Strategy at Saxo Bank in Copenhagen.

He added: "The market is betting that we could see an end to inflation concerns—not necessarily a collapse in inflation, but at least a halt to further acceleration."

The most actively traded copper contract on the Shanghai Futures Exchange rose 1.2% to 104,660 yuan ($15,474) per ton, while US copper futures on COMEX advanced 1.8% to $6.39 per pound.

The gains came as other markets also reacted to the news, with oil prices declining and global equities moving higher.

Aluminum on the London Metal Exchange climbed 0.8% to $3,531 per ton, amid expectations that any peace agreement could ease pressure on Gulf aluminum smelters affected by recent disruptions.

The premium for spot copper over three-month futures on the London Metal Exchange narrowed to $6.05 per ton from $104.56 at the beginning of the month, when concerns over supply shortages were at their peak.

"The sharp decline in this premium reflects the fading of geopolitical risk premiums and speculative long positions as the market reassesses the scale and duration of supply disruptions," said Rubankar R.M., Head of Market Research and Data Intelligence at AL Circle.

Among other base metals, zinc on the London Metal Exchange rose 1.8% to $3,560 per ton, lead gained 0.5% to $1,955 per ton, nickel added 0.7% to $17,820 per ton, and tin advanced 1.1% to $53,450 per ton.