Asian markets were rocked on June 13th. This economic downturn came on the heels of Israel’s military strike on Iran, which increased political turmoil throughout the surrounding area. The news, which first broke in Tehran yesterday, is shaping up to further sour investor sentiment and send shockwaves through almost all currencies and commodities.
Asian stocks fell sharply as investors reacted to the increased risk. Most strikingly, they pointed to the uncertainty around geopolitical stability. The Japanese yen, typically considered the original safe-haven currency, advanced 0.73% versus the greenback. At its peak, it was enough for a stellar peak of 142.81. This surge was a clear sign of a flight to safety, as investors looked to reduce their risk of losses during the period of unrest.
All other Asian currencies depreciated against the dollar. The South Korean won, which fell by 0.9%, echoed increasing fears among traders. The Indian INR=IN and Malaysian MYR=MY rupees each lost 0.4%, and the Singapore dollar SING=SG declined 0.2%. These trends are part of a larger Asian currency trend towards depreciation in reaction to regional turmoil.
What didn’t help was that the same attack impacted currency values, but had a distinct and immediate effect on oil prices. When the conflict deepened, oil prices jumped 13%. This panic buying was driven by concerns over possible interruptions in supply chains. This recent leap is a powerful reminder of how geopolitical events and market reactions are closely linked.
Eyewitness accounts from Tehran reported debris from an apartment building scattered across parked vehicles following the attack, highlighting the incident’s severity and its implications for civilian safety. The damage we see today is just a small example of the crisis that is occurring all across the country and what it can lead to.