* 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

(Updates to Asia afternoon)

By Ankur Banerjee

SINGAPORE, Aug 3 (Reuters) - Oil prices skidded and U.S. and

European stock futures rose on Monday as hopes of a peace deal

in the Middle East grew, while the yen firmed to a three-month

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

prop up the frail currency.

Brent crude futures sank more than 4% to $83.88 a

barrel after U.S. President Donald Trump said talks with Iran

will happen on Monday. He had earlier called off an imminent

attack on Iran to reach a deal to reopen the Strait of Hormuz

and resolve the impasse over Tehran's nuclear capabilities.

S&P 500 futures rose 0.6% while Nasdaq futures

gained 0.8%. European futures were 0.8% higher.

Asian stocks struggled at the start of the week after a

turbulent July that saw wild swings on worries over the AI trade

as investors fretted over massive capital spending and whether

it will provide returns quickly enough.

Japan's Nikkei dropped 1%, while South Korea's KOSPI

slid more than 5%. MSCI's broadest index of Asia-Pacific

shares outside Japan was down 1%.

YEN BEARS COWER AFTER JOINT INTERVENTION

The Japanese yen strengthened 0.5% to 156.49 per U.S.

dollar after a sudden move earlier in the day to its strongest

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

bout of intervention.

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

intervention 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 fresh 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' carries 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 boost, underscoring

the challenge facing policymakers with rising oil prices and a

wide interest-rate differential against other major economies.

The yen had been rooted near 40-year lows of 163.99 per U.S.

dollar in recent weeks before the latest bout of interventions,

with net short positions on the yen of roughly $12.5 billion,

the highest in two years, data from a U.S. regulator showed.

"Near term, 155 remains the key level to watch, having

effectively served as the market floor/resistance post May

intervention this year," said Masahiko Loo, senior fixed income

strategist at State Street Investment Management.

The action and comments from Bessent repeating his calls for

further interest-rate hikes by the BOJ have put monetary policy

in focus.

The 2-year JGB yield, which is most sensitive

to near-term monetary policy moves, briefly hit 1.545% on

Monday, the highest since 1995, as markets priced in the chance

of an early rate hike.

"Intervention may shape the next few months. BOJ

normalisation and hedging flows will shape the next few years.

The next major move in the yen may ultimately be higher, not

lower," Loo said.

The drop in oil prices led U.S. Treasury yields lower. The

yield on the 30-year bond fell 3.7 basis points to

5.238%, easing away from a 19-year high it touched last week. It

had jumped 372 basis points in July as investors grappled with

confusion around the Iran war and the policy outlook for the

Federal Reserve.