Middle East Escalation Rattles Asia Markets on July 13
US strikes on Iran and Hormuz fears drove oil up 4%, tanked Asian equities, and roiled currency markets to open the week.
Global markets opened Monday under heavy pressure as the United States launched fresh waves of strikes against Iranian targets, prompting Iran to close the Strait of Hormuz and retaliate with ballistic missile attacks on Jordan, sending shockwaves through Asia-Pacific trading sessions on July 13, 2026. Equities in South Korea, Japan, Europe, and the US all fell sharply, with South Korean shares tumbling more than 5% as profit-taking in SK Hynix compounded the geopolitical selloff and Japan's Nikkei followed lower.
Oil surged more than 4% at the Globex open on fears that Hormuz disruptions could choke a critical artery for global energy shipments, while gold paradoxically slid more than 1% — a sign that some investors were selling safe-haven assets to cover losses elsewhere or responding to a Fed inflation warning. Analysts remained divided on whether the Hormuz flare-up posed a lasting threat to any existing ceasefire arrangement, adding an additional layer of uncertainty to an already volatile session.
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On the currency front, the People's Bank of China set its USD/CNY reference rate at 6.7972, slightly weaker than the market estimate of 6.7850, signaling measured tolerance for yuan softness amid the turmoil. Angola added the yuan to its official bank reserve currency options alongside the dollar and euro, reflecting deepening financial ties with Beijing even as broader dollar demand fluctuated. Goldman Sachs separately forecast that US core CPI would ease to 2.8% year-on-year in June, offering a rare piece of potentially calming macro news for traders navigating the chaos.
The Bank of Japan was reported to be weighing a higher 2026 growth forecast while holding rates steady, keeping inflation risks front of mind. New Zealand offered one bright spot: its services sector returned to expansion in June, with the PSI climbing to 50.6. Chinese independent "teapot" refiners pivoted away from Iranian crude, opting instead for Qatari, Iraqi, and UAE supplies as sanctions risks intensified.
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