The Bank of Japan raised its benchmark rate to 1%, the highest since 1995, citing energy-driven price pressures and rising inflation expectations. The move continues Japan’s shift away from decades of ultra-low borrowing costs.
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Oil prices dropped after Trump announced an initial US-Iran deal to reopen the Strait of Hormuz, but shipping, insurance and mine-clearing hurdles could delay a return to normal. Analysts warn energy, fertiliser and consumer prices may remain under pressure for months.
U.S. inflation rose to 4.2% in May, the highest level in three years, as energy costs tied to the Iran war continued to climb. Core inflation increased 2.9%, while wage growth lagged behind the broader rise in prices.
U.S. employers added 172,000 jobs in May and the unemployment rate stayed at 4.3%, signaling a resilient labor market. The strong report comes as inflation and energy prices rise, complicating the Federal Reserve’s next interest rate decision.
The U.S. said Iranian missiles and drones targeting Kuwait and Bahrain failed or were intercepted, while Kuwait reported a later airport attack that caused injuries and damage. Washington struck an Iranian ground control station on Qeshm Island as both sides disputed the status of ceasefire talks.
President Trump says preventing Iran from obtaining nuclear weapons is his top priority, dismissing concerns about the economic impact on Americans amid rising inflation and gas prices. Democrats and polls highlight widespread public dissatisfaction with his handling of the economy during the Iran conflict.
The U.S. added 178,000 jobs in March, exceeding expectations as the unemployment rate fell to 4.3%. Gains in health care, construction, and transportation contrast with concerns over wage growth, labor force participation, and rising energy costs amid the Iran conflict.
U.S. stocks fell sharply and oil prices surged after President Trump pledged continued strikes on Iran without outlining a ceasefire plan or reopening the Strait of Hormuz. The Dow dropped over 600 points as energy prices and inflation concerns rose.