Asian FX Weakens as Iran-Israel Conflict Escalates, Safe Havens Surge

Asian currencies broadly weakened during Monday's session as the Iran-Israel missile exchange intensified risk-off sentiment across markets. USD/JPY climbed 0.5% to 156.75 despite verbal intervention threats from Japanese officials, while AUD/USD dropped 0.6% to 0.6420. The ongoing military escalation saw Iran launch over 200 missiles at Israeli targets, with Israel responding with strikes on Iranian military installations. Safe-haven currencies including USD and CHF outperformed, with USD/CHF rising to 0.9150. Asian equity markets tumbled 1.5-2.0%, adding pressure on risk-sensitive currencies. Oil prices spiked 3% on supply disruption fears, potentially adding to global inflation concerns. Technical levels show USD/JPY testing critical resistance at 157.00, while AUD/USD approaches support at 0.6400. Traders should prepare for continued volatility as the situation remains fluid, with any de-escalation likely to trigger sharp reversals in safe-haven positioning.