One week after the joint U.S.-Japan intervention to support the country’s embattled yen, an initial rally appears to be waning as the currency drifts lower. 

The coordinated involvement from the Treasury and BoJ had initially lifted the yen as high as 155 to the dollar, down from just above 163 beforehand. 

But since then, it has wavered, giving up almost half of those gains to settle around 158.50 to the dollar, seven days after the move was announced on July 31. 

The yen’s fundamentals remain under scrutiny, with market watchers now turning their eye to domestic policy changes rather than government-backed support measures. 

Robert Sockin, chief U.S. economist at PGIM, is “not convinced” the strategy will work, writing in a note published Wednesday. 

“Yes, the intervention is no doubt squeezing out short yen positions in the short term, but I’m skeptical that it will work in reversing the JPY weakness trend by itself…and it may backfire spectacularly,” he wrote. 

Should it backfire, Sockin added that speculators might amplify the reversal by aggressively selling yen and Treasurys together to force the BoJ and Fed into precautionary rate hikes. 

The coordinated intervention is a rare U.S. effort to support another major currency and underscored Washington’s concern that prolonged yen weakness could fuel inflation in Japan, pressure other Asian currencies and destabilize global markets. 

BofA said in a recent note that the objective of the central banks in the short-term is to break ¥155, but that level was touched only briefly before moving lower again.

Treasury Secretary Scott Bessent acknowledged in an interview with CNBC last week that intervention alone would not determine the currency’s direction.

“You can give market signals with intervention, but it’s policy that turns it,” he said, adding that the U.S. participated because it was optimistic about Japan’s policy path.

— CNBC’s Luke Fountain also contributed to this report.

European stock markets finished lower on Friday, as uncertainty over U.S.-Iran peace talks weighed on investor sentiment.

The pan-European Stoxx 600 closed the day down 0.6%, with most regional sectors and major bourses in negative territory. Technology stocks led the gains, rising 1.4%, while mining stocks saw the largest losses, sliding 1.7%.

Novo Nordisk stock rose more than 5% on Friday after prescription data from its chief rival Eli Lilly’s newly launched weight loss pill showed Novo’s medicine kept momentum even after competition entered the market.

Lilly’s pill, Foundayo, launched earlier this month, while Novo’s Wegovy pill launched in early January in the U.S. Foundayo generated about 3,700 prescriptions in its second week after launch, according to IQVIA data cited by analysts. By comparison, Novo’s Wegovy pill drew over 18,000 prescriptions in its second week.

Shares in SAP surged 4.7% after the German multinational enterprise software giant announced a rise in operating profits of almost 17%, and a 19% jump in cloud revenues, in its latest quarterly earnings.

SAP CEO Christian Klein told CNBC’s “Squawk Box Europe” on Friday that the company is “uniquely positioned to win in business AI” adding that it will “double down and reinvest” more money into AI innovation.

Renault shares, meanwhile, went into reverse, sliding 3.6% after the French carmaker said its first-quarter sales were 3.3% lower than the same three-month period last year. Its group revenues rose 7.3% in the period, however, reaching 12.5 billion euros ($14.6 billion).

Investor attention remains focused on developments in the Middle East. On Thursday, U.S. President Donald Trump told reporters, “don’t rush me,” when questioned on a long-term deal with Iran. He also said he won’t put a “timetable” on when the war will end.

Overnight, it was reported that U.S. forces had boarded and searched another tanker thought to be carrying Iranian oil through the Indian Ocean.

Oil prices edged higher on Friday, with global benchmark Brent crude futures adding 0.5% to reach $105.65 a barrel, while U.S. West Texas Intermediate futures were marginally higher at $96.12, a 0.4% increase.

Back in Europe, investors monitored another flurry of corporate earnings, with Eni, Orange, and Volvo among the firms updating shareholders on their finances.

U.K. retail sales increased 0.7% in March, according to new Office for National Statistics data, outweighing the 0.1% forecast by economists. In Germany, meanwhile, the Ifo Institute’s monthly business climate index fell to 84.4 in April — its lowest level since May 2020, at the start of the Covid-19 pandemic — suggesting the Iran war is now weighing heavily on the country’s economic outlook.

French consumer confidence in April dipped to its lowest level in almost three years, according to data published by France’s…

Treasury yields rose on Thursday as investors digested mixed messages around the state of negotiations between the U.S. and Iran.

The benchmark 10-year Treasury yield was more than 5 basis points higher at 4.384%. The 30-year Treasury bond yield was up by more than 4 basis points at 4.941%. The 2-year Treasury note yield was higher by more than 5 basis points, reaching 3.937%.

One basis point is equal to 0.01%, and yields and prices move in opposite directions.

Global markets have been struggling to decipher contradictory statements from Washington and Tehran over the last 48 hours regarding the status of peace talks. The U.S. says negotiations over a proposed peace plan have been taking place, while Iran denies any direct interaction with Washington on the matter.

Iranian Foreign Minister Abbas Araghchi reportedly told state media on Wednesday that officials were reviewing an American proposal to end the war, but said Tehran had no intention of having talks with the U.S.

He added that an exchange of messages between the two countries through mediators “does not mean negotiations with the U.S.,” Reuters reported.

Iran state media also reported Wednesday that the Islamic Republic would reject a U.S. ceasefire offer, instead countering with its five-point list that would give Tehran control over the Strait of Hormuz.

In a post on Truth Social Thursday, President Donald Trump said that Iran “better get serious soon, before it is too late, because once that happens, there is NO TURNING BACK, and it won’t be pretty!”

Yields rose further after the bond market saw its second disappointing Treasury auction this week. Wednesday’s $70 billion 5-year auction followed a poor $69 billion 2-year auction on Tuesday, which recorded its weakest demand since March 2025. 

Despite a quiet week for U.S. economic data releases, traders will be monitoring weekly initial jobless claims data on Thursday.

— CNBC’s Holly Ellyatt also contributed to this report.