USD/JPY Surges as U.S.-Iran Tensions Spike Oil and Bond Yields

A fresh escalation in U.S.-Iran hostilities rattled global markets, triggering sharp moves across forex, commodities, and fixed income. Crude oil prices surged on supply disruption fears stemming from the Middle East flare-up, while bond yields spiked as markets repriced risk premiums. The geopolitical shock drove safe-haven flows into the Japanese yen and Swiss franc, pressuring USD/JPY and EUR/CHF lower, while commodity-linked currencies such as CAD and NOK found support from rising oil prices. USD/CAD declined as the Canadian dollar benefited from the crude rally. Risk-sensitive pairs including AUD/USD and NZD/USD came under pressure as broader risk appetite deteriorated across regions. The spike in volatility has widened spreads and reduced liquidity in several major pairs. Traders should exercise caution given the elevated geopolitical uncertainty, with key focus on any diplomatic developments or further military escalation. Near-term, safe-haven demand is likely to persist, supporting JPY and CHF while weighing on risk currencies.