AUD/USD, USD/JPY React as Brent Tops $100 on Iran Attacks

Asia-Pacific forex markets experienced significant volatility as Brent crude surged above $100 per barrel following intensified Iranian attacks, including drone strikes on an Oman energy facility and a projectile hitting a container ship near the UAE port of Jebel Ali. The geopolitical escalation has triggered broad risk-off sentiment across the region. USD/JPY faces competing pressures as BoJ Governor Ueda warned that yen weakness could amplify inflation amid rising oil prices, reinforcing expectations of tighter monetary policy. Meanwhile, AUD/USD is caught between risk-off headwinds and domestic hawkish signals, with CBA forecasting RBA rate hikes in both March and May as inflation risks intensify from higher energy costs and Australia's decision to allow higher sulphur fuel imports to protect supply security. Fitch's warning that rising local government debt could narrow China's fiscal headroom adds further downside risk to risk-sensitive currencies. CMA CGM's resumption of bookings from Gulf ports offers a tentative positive signal for supply chains. Traders should monitor oil price developments closely, as sustained prices above $100 could accelerate central bank tightening across the region and drive further safe-haven flows into the US dollar and Japanese yen.