TMGM Daily Market Breakfast: 2026-08-12
Morning Snapshot
- Japanese and US authorities carried out a rare coordinated foreign-exchange intervention, the first joint action since 2011, as the yen remained near 159.25 per US dollar after Japan’s second intervention of 2026.
- Oil prices remained shaped by Strait of Hormuz tensions, with reports citing Iran’s conditions for reopening the waterway, continued US-Iran confrontation and wider refinery disruptions alongside a large build in US crude inventories.
- A report ahead of the US July Consumer Price Index release said Bureau of Labor Statistics data due on Wednesday was set to show softer headline and core inflation than in June.
Overview
The reporting period was dominated by three themes: coordinated currency action involving Japan and the United States, persistent geopolitical disruption around the Strait of Hormuz, and the scheduled release of key US inflation data. Together, these developments kept attention on official policy actions, energy supply risks and the near-term macroeconomic calendar.
In foreign exchange, supplied reports described Japan’s second intervention of 2026, conducted jointly with the United States, as a rare step that narrowed the yen’s undervaluation and carried broader regional significance for other Asian currencies. In energy, articles pointed to a continued risk premium linked to the closure of the Strait of Hormuz, while also noting that a 9.1 million-barrel increase in US crude inventories offset some of the immediate supply-driven pressure. In macroeconomics, the upcoming US CPI release was highlighted as the main scheduled data event in the window.
Macroeconomics & Central Banks
US-Japan coordinated intervention marks rare official currency action
Two supplied articles reported that Japan’s second foreign-exchange intervention of 2026 was conducted in coordination with the United States, marking the first joint US-Japan intervention since 2011. The reports said the yen remained near 159.25 per US dollar after the move and described the action as significant because US participation added credibility to Japan’s efforts to curb yen weakness. One article also said the intervention narrowed the yen’s undervaluation from extreme levels and could help ease pressure on other undervalued Asian currencies, including the South Korean won and Chinese renminbi.
US July CPI release highlighted as the main scheduled inflation event
A supplied article said the US Bureau of Labor Statistics was due to publish July Consumer Price Index data on Wednesday and that the report was set to show a small decline in both headline consumer inflation and core inflation. The article presented the release as a key macroeconomic event during the reporting window and noted that it was being closely followed as markets reassessed Federal Reserve rate-hike expectations.
Energy & Commodities
Strait of Hormuz tensions and refinery disruptions keep oil supply risks elevated
Two supplied articles said oil markets remained under pressure from the prolonged disruption around the Strait of Hormuz, with Iran maintaining that the waterway would remain closed until its conditions were met. The reports said those demands included an end to the US war and blockade, the release of frozen Iranian assets and a regional ceasefire, while another article said Iran had also raised reparations among its conditions and that US President Donald Trump had responded with a demand for compensation for conflict victims. The coverage also cited continued confrontation in the area, including a report that US forces disabled a Panama-flagged cargo ship heading toward an Iranian port after it ignored warnings, as well as drone attacks on refineries in Saudi Arabia, Russia and Libya that added to concerns about tighter global fuel supply.
Large US crude inventory build offsets part of the immediate oil supply concern
One supplied article said West Texas Intermediate reversed lower on Wednesday after approaching a nearly two-week high, with a 9.1 million-barrel increase in US crude inventories weighing on prices even as supply concerns persisted. The same report said the International Energy Agency forecast global oil supply to fall by 4.3 million barrels per day this year, underscoring the tension between near-term inventory data and broader disruption to supply flows.
Scheduled Events
- US July Consumer Price Index release — Wednesday: The US Bureau of Labor Statistics is due to publish July CPI data, which the supplied article said was set to show a small decline in headline and core inflation.
Closing Summary
The main developments in the reporting window were the rare coordinated US-Japan currency intervention, continued energy-market disruption linked to the Strait of Hormuz and related refinery outages, and the scheduled release of US July CPI data.
