USD/JPY & Oil Surge as Pentagon Prepares Ground Operations in Iran

Geopolitical risk has escalated sharply over the weekend following a Washington Post report indicating the Pentagon is preparing for weeks of ground operations in Iran, with the USS Tripoli deployed to the Middle East since March 13. This development is expected to drive significant safe-haven flows into JPY and CHF when markets open, putting downward pressure on USD/JPY and USD/CHF. Crude oil prices are likely to gap higher, supporting commodity-linked currencies like CAD and NOK while weighing on oil-importing nations' currencies such as JPY on the energy cost front. Secretary Rubio's hints at an endgame strategy add further uncertainty to the geopolitical landscape. Traders should watch USD/JPY support near recent lows, as yen strength typically accelerates during military escalations in the Middle East. EUR/USD may also benefit from dollar softness if risk-off sentiment dominates. Gold is expected to test new highs as a traditional safe-haven asset. Volatility is anticipated to spike significantly at the Monday open, with wide spreads likely across major pairs during the Asian session.