The U.S. Central Command confirmed a 13th consecutive night of strikes against Iranian military infrastructure, including drone storage and communication networks, aimed at securing the Strait of Hormuz. This intensified posture has spooked global markets, as President Trump warned of significant military retaliation against Iran should Houthi militants continue attacks on shipping, including recent strikes on Saudi Arabian tankers in the Red Sea.

Taylor Nugent, a senior economist at National Australia Bank, noted that the shifting balance of inflation risks is forcing global bond yields upward. The market reaction was swift: 10-year Japanese government bond yields climbed 3 basis points to 2.800%, while Australian and New Zealand 10-year yields surged 8 basis points to 5.0780% and 4.7960%, respectively.

Beyond the energy sector, broader financial sentiment remains fragile. Asian equity markets retreated following a weak lead from Wall Street, where disappointing earnings from Alphabet and Tesla reignited investor skepticism regarding the sustainability of heavy artificial intelligence expenditures. The sell-off hit regional indices hard, with South Korea’s Kospi dropping 5.3%, Japan’s Nikkei falling 2.9%, and Hong Kong’s Hang Seng Index declining 1.3%.