Some of the key asian stock market indices extended their decline on Wednesday as the US-Iran war escalated further, with no signs of pullback.
Japan's Nikkei 225 plunged 2.48% to 64,572.62, South Korea's Kospi tanked 2.6% to and Australia's S&P/ASX 200 was down 1.35% to 8,945.50. Hongkong's Hang Seng index also opened in the red, slipping 0.19% to 25,280.82.
The fall in indices comes amid high West Asia tensions, with US Embassy in Dubai warning citizens in the region against further "unforeseen escalation".
The 10-year Treasury yield climbed five basis points to 4.80% in New York trading, pushing down Australian bonds at the open. New Zealand government debt also declined, with traders pricing in a near-certain rate hike by the central bank later Wednesday.
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Crude oil prices remained on the boil as the future of safe passage of transit vessels through the Strait of Hormuz became foggier. Global benchmark brent crude traded over 2% higher at $96.6 per barrel, while West Texas Intermediate traded 1.75% higher at $91.78 per barrel.
Overnight, the Islamic Revolutionary Guard Corps (IRGC) claimed that it conducted a "heavy" ballistic missile attack on Prince Hassan airbase and a US Marine base in Jordan in retalliation against earlier US strikes that killed civilians.
American President Donald Trump had said, "if the failed Nation of Iran retaliates for this very justified attack, they will be hit again at a much harder and higher level," after the US military struck targets in Iran over attempted attacks on shipping.
The renewed increase in energy prices is amplifying concerns related to inflation, already fueled by government spending and heavy corporate borrowing to finance the artificial-intelligence buildout.
Markets are raising the odds of a Fed hike in September, as investors remain watchful of crude oil and bond yields for signs of further strain on equities.
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