Brent crude rose more than 1% to above $106 a barrel

Asian currencies were mostly weaker on Monday, led by the yen’s slide toward recent lows as the Iran-U.S. standoff kept oil prices elevated and investors turned to a busy week of inflation and central-bank data.

The USD/JPY pair gained 0.3% to 157.78.

Brent crude rose more than 1% to above $106 a barrel. The Iran-U.S. standoff has kept energy-supply risks higher and reinforced inflation concerns.

The yen slid nearly 0.3% to 157.7 per dollar after rising on Friday.

The yen has remained under pressure despite the Bank of Japan’s September rate increase, with markets questioning whether policymakers are moving quickly enough to close the interest-rate gap with other economies.

The Australian dollar was near $0.70, little changed, ahead of the Reserve Bank of Australia’s policy decision on Tuesday. Markets expect the RBA to raise its cash rate by 25 basis points to 4.60%, its highest level in around 15 years.

The yuan softened, with the USD/CNH pair near 6.72, while USD/CNY advanced marginally to 6.71.

The offshore yuan had firmed earlier this month but came under pressure after the three-day meeting between Chinese President Xi Jinping and Trump failed to produce major public breakthroughs on contentious issues.

Elsewhere, stronger dollar has been supported by solid U.S. economic data and elevated longer-dated Treasury yields. Markets are increasingly expecting the central bank to maintain a hawkish stance as higher energy costs threaten to keep inflation higher.

The market’s attention now turns to the August PCE inflation report on Wednesday and September nonfarm payrolls on Friday. The PCE report is scheduled for September 30, while the September employment report is due October 2.

Markets are currently pricing about a 65% chance of another U.S. central bank rate hike at the end of October, according to CME FedWatch. That follows the central bank’s September increase to 3.75% – 4.00% and subsequent comments from officials suggesting more tightening could be needed if inflation remains persistent.