Instant view: Oil, Japan’s yen up on reports Israeli missiles hit Iran
Oil and gold prices rose and Japan’s yen rallied on Friday on reports Israeli missiles have hit a site in Iran.
Israel has struck Iran, three people familiar with the matter said, as Iranian state media reported early on Friday that its forces had destroyed Israeli drones, days after Iran launched a retaliatory drone strike on Israel.
The Israeli military had no comment on the reports. Reuters could not immediately confirm the reports.
Israel had said it was going to retaliate against Iran after the latter’s April 13 missile and drone attack.
Market reaction: [US/] [MKTS/GLOB] [O/R]
QUOTES:
PRASHANT NEWNAHA, SENIOR ASIA-PACIFIC RATES STRATEGIST, TD SECURITIES, SINGAPORE
“Markets clearly caught offside heading into the weekend. Attention has pivoted away from inflation to renewed concerns that the Middle East conflict could re-escalate. This is driving a strong flight to quality bid.”
“Given the market has no sense of how long or deep this conflict could play out, there is no compelling argument to hold significant risk positions over the weekend. Risk assets are likely to remain on the backfoot.”
SHOKI OMORI, CHIEF JAPAN DESK STRATEGIST, MIZUHO SECURITIES, TOKYO
“The rise in commodity prices and the dollar is going to weigh on Japanese imports. Given the geopolitical risks and the rise in volatility in EM currencies, the BOJ (Bank of Japan) is going to stay on pause in April. They will be cautious about the situation, as well as currency volatility.”
VASU MENON, MANAGING DIRECTOR, INVESTMENT STRATEGY, OCBC, SINGAPORE
Here’s an instant view of the situation based on the information you provided:
Upward Pressure:
- Oil Prices:Â News of potential conflict in the Middle East, a major oil-producing region, often leads to a surge in oil prices due to concerns about supply disruptions.
- Japanese Yen:Â The yen is sometimes seen as a safe-haven currency during times of global uncertainty. Investors might be seeking the security of the yen if they perceive the situation in Iran as a risk.
Possible Reasons for Limited Upward Movement (depending on the details):
- Unconfirmed Reports:Â If the Israeli missile strike reports are unconfirmed or the extent of the damage is unclear, the upward price movements might be limited.
- Limited Strike:Â If the Israeli strike was a targeted event and Iran’s response is contained, the overall impact on oil supply might be minimal.
- Previous Market Reaction:Â There might have already been an initial price increase in oil and yen earlier when the reports first surfaced. This could explain a muted response now.
Recommended Next Steps:
- Look for updates on the situation in Iran. Are the reports confirmed? What is the extent of the damage and potential retaliation?
- Check current oil prices and the Japanese yen exchange rate. How much have they changed compared to yesterday’s closing prices?
- Explore financial news websites for further analysis from market experts.