USD/JPY, Gold React as US-Israel Military Strikes on Iran Escalate

Geopolitical risk dominates forex markets as the new trading week opens, with the US and Israel launching coordinated military strikes against Iran, escalating Middle East tensions to their highest level in years. Reports indicate the strikes were delayed from the prior week due to operational and intelligence considerations, but the conflict has now intensified with Iran retaliating. Safe-haven flows are expected to drive significant demand for the Japanese yen and Swiss franc, pressuring USD/JPY and EUR/CHF lower, while gold is likely surging on flight-to-safety positioning. Crude oil prices are anticipated to spike sharply, supporting commodity-linked currencies such as CAD and NOK, while risk-sensitive pairs like AUD/USD and NZD/USD face downside pressure. Traders should monitor USD/JPY support near key psychological levels as yen strength accelerates, and watch for potential intervention signals from the Bank of Japan if volatility becomes disorderly. Elevated geopolitical uncertainty suggests widened spreads and reduced liquidity, particularly during the Asian session. Risk management is paramount as headlines could shift market direction rapidly throughout the week.