The dominant macro driver overnight is the escalating US-Iran conflict in the Persian Gulf, now in its tenth consecutive day of US strikes, which has pushed Brent crude to $91.34/bbl (+2.38%) and WTI to $84.51/bbl (+1.54%), while gold surged to a fresh record at $4,088.80/oz (+1.96%) as safe-haven demand intensified. US Treasury yields moved higher across the curve — the 2-year reached 4.21% (+3bp), the 10-year 4.60% (+5bp), and the 30-year 5.11% (+5bp) — a bear-steepening configuration that signals markets are pricing in renewed inflation risk from energy rather than growth optimism, with the long end bearing the greater adjustment burden amid Hormuz and Houthi shipping threat concerns. Concurrently, Trump tariff threats tied to Greenland and ongoing China tariff truce dynamics added a secondary layer of trade-policy uncertainty to an already geopolitically charged session.
For Asia-Pacific, the cross-asset pressure is concentrated most acutely in Japan and Korea. USD/JPY rose to 163.24 (+0.46%), deepening yen weakness toward 40-year lows, which compounds the BOJ's dilemma as imported energy inflation accelerates even as higher borrowing costs — following the June hike to 1.0% — are already weighing on nearly half of Japanese firms per the Reuters survey; the Nikkei VIX spiked 14.22% to 36.86, reflecting acute domestic stress. The KOSPI fell 4.46%, with semiconductor hardware names at the epicentre of the selloff — consistent with the AI/hardware correction theme — while the CSI 300 dropped 3.60% despite the SSE composite gaining 0.85%, suggesting divergent onshore dynamics. USD/CNY edged down to 6.7651 (-0.11%), a marginal yuan firming that contrasts with broader dollar strength against regional peers, while Australian energy exposure provided a partial offset with ASX Energy the sole meaningful ASX sector gainer at +1.80%, even as the ASX 200 closed marginally lower at -0.06%.