* Yen pushes away from 40-year low after joint intervention

* Trump calls joint currency operation a sign of friendship

* Oil prices drop after Trump says Iran talks to happen on

Monday

(Recasts for U.S. open, updates prices throughout)

By Nell Mackenzie and Ankur Banerjee

LONDON/SINGAPORE, Aug 3 (Reuters) - Signs that U.S.-Iran

tensions were easing again set Wall Street up for a positive

start to August, weighing on crude prices and lifting stock

futures, while investors prepared for another week packed with

earnings and economic data.

Pre-market trading had S&P futures up 0.6% and

Nasdaq futures 0.4% higher.

Oil prices fell sharply while European stock markets

continued their climb. The yen firmed to a three-month high

after the U.S. and Japan confirmed joint intervention to support

it.

Brent crude futures sank $4.40, more than 5%, to

$83.52 a barrel after U.S. President Donald Trump said talks

with Iran would take place on Monday. He had earlier called off

an attack on Iran to pursue a deal to reopen the Strait of

Hormuz.

European shares rose 0.4% to start August on a firm

note. The German DAX notched an intra-day record and

was last up 1.4%.

"For equity markets, the fundamental picture remains

encouraging," said Bruno Schneller, managing partner at

multi-family office Erlen Capital Management.

"Earnings have generally held up well, and companies with

strong pricing power and resilient business models continue to

outperform."

Over half of the S&P 500 component companies have reported

earnings so far, with 86% of firms beating earnings

expectations, research on Monday from Florian Ielpo, head of

macro at Lombard Odier Investment Managers, noted.

Traders also weighed potential consolidation in the

healthcare sector, after a report said Bristol Myers Squibb ( BMY )

and AstraZeneca ( AZN ) had held preliminary merger

talks about possibly creating the world's biggest drugmaker,

worth nearly $400 billion.

AstraZeneca ( AZN ) shares at one point dipped almost 7% on reports

of the potential tie-up.

Asian stocks struggled as the new month began after a

turbulent July marked by wild swings as investors fretted over

massive capital spending on AI and whether it will provide

returns quickly enough.

Japan's Nikkei closed 1% lower, while South Korea's

KOSPI slid more than 5%. This weighed on the MSCI's

broadest index of world shares, leaving it flat.

YEN BEARS COWER AFTER JOINT INTERVENTION

The Japanese yen strengthened over 0.5% to 156.77 per

U.S. dollar after a jump earlier in the day to its strongest

since early May at 155.2, putting traders on alert for another

bout of intervention.

Japan and the U.S. conducted coordinated yen-buying and will

not hesitate to take further action, Japan's Finance Ministry

said on Monday, confirming a rare bilateral action to halt the

yen's slide to 40-year lows.

U.S. Treasury Secretary Scott Bessent also said the United

States would consider increasing in coming months the size of

the Federal Reserve's repurchase facility providing temporary

dollar liquidity, calling the tool an "important backstop".

"Bessent's comments arguably carry more weight than the

intervention itself," said Matt Simpson, senior market analyst

at StoneX. "It feels like a safe bet that the Japanese yen has

troughed for the year. The words 'joint intervention' carry a

lot of weight in these markets and is a term rarely used."

Trump said on Sunday the United States was helping Japan prop up

the yen as a sign of friendship and to help the world economy.

Tokyo's solo intervention conducted between late April and

early May caused only a brief yen rebound, while a rate hike in

June by the Bank of Japan provided little support, underscoring

the challenge policymakers face of rising oil prices and a wide

interest-rate differential against other major economies.

The yen had been rooted near 40-year lows around 164 per U.S.

dollar in recent weeks before the latest interventions, with net

short yen positions of roughly $12.5 billion, the highest in two

years, data from a U.S. regulator showed.

Bessent repeated calls for further interest-rate hikes by

the Bank of Japan.

Elsewhere, U.S. Treasury yields retreated as oil prices

fell.

The yield on the 30-year bond fell over 5 basis

points to around 5.22%, easing away from the 19-year high it

touched last week.

It had soared around 37 basis points in July as investors

grappled with confusion around the Iran war and the policy

outlook for the Federal Reserve.