Asian shares slip on Monday as oil jumps; Japan's Nikkei falls 1% and the dollar firms

Asian equity markets fell on Monday, July 13, as tensions in the Persian Gulf intensified and oil prices jumped. Japan's Nikkei 225 dropped 1%, after shedding 1.7% last week, while MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2%.

The US dollar and Treasury yields rose at the same time, with investors nudging up the odds of a Federal Reserve rate hike on fears that higher energy costs will revive inflation. The dollar added 0.1% against the yen to 161.96. Brent crude climbed 3.3% in early trade to $78.50 a barrel and West Texas Intermediate rose 3.4% to $73.83. Both costlier oil and a stronger dollar press directly on Iran's currency and gold markets.