The yield on benchmark 10-year U.S. Treasury notes last stood at 1.7534%, down more than 7 basis points from a U.S. close of 1.825% on Tuesday<\/span><\/figure>\n<\/div>\nAsian shares and U.S. treasury yields tumbled on Wednesday, while the yen, gold and oil shot higher after Iran fired rockets at Iraqi airbases hosting U.S. military forces, stoking fears of a wider conflict in the Middle East. Iran\u2019s missile attacks on the Ain Al-Asad air base and another in Erbil, Iraq, early Wednesday came hours after the funeral of an Iranian commander whose killing in a U.S. drone strike has intensified tensions in the region.<\/p>\n
MSCI\u2019s broadest index of Asia-Pacific shares outside Japan was 1% lower shortly after China\u2019s share markets began trading, with China\u2019s blue-chip CSI300 index down 0.56%. Japan\u2019s Nikkei tumbled 2.2% and Australian shares fell more than 1%. U.S. stock futures were also sharply lower, with S&P500 e-minis off nearly 1%. \u201cIt\u2019s a very classic risk off,\u201d said Rob Carnell, Asia-Pacific chief economist at ING in Singapore.<\/p>\n
\u201cThis is the Iranian response to the killing of Soleimani. We now have to see what the U.S. response to the Iranian response is. This looks as if it could escalate,\u201d he said. \u201cIf you see U.S. treasuries rallying a bit this morning, expect them to rally quite a bit further should there be a forceful response from the United States, which I\u2019d imagine there would be\u2026from a market perspective I think this one could run and run.\u201d<\/p>\n
The yield on benchmark 10-year U.S. Treasury notes last stood at 1.7534%, down more than 7 basis points from a U.S. close of 1.825% on Tuesday, though up from session lows. U.S. 10-year Treasury futures had earlier peaked at their highest level since November, and were last up 0.63%.<\/p>\n
The two-year yield dropped to 1.4982% compared with a U.S. close of 1.546%. The dollar slipped against the yen, with the Japanese currency touching its strongest point against the greenback since October. The U.S. currency was last down 0.28% against the yen at 108.11. The euro was relatively unmoved on the day, rising 0.04% to buy $1.1155. The dollar index, which measures the greenback against six major peers, was 0.19% lower at 96.819.<\/p>\n
In commodity markets, global benchmark Brent crude futures shot back above $70 per dollar to their highest level since mid-September, and were last up 3.59% at $70.72 per barrel. U.S. crude soared 3.46% to $64.87 a barrel.
The flight to safety and a falling dollar supported gold, which rocketed 1.80% on the spot market to $1,602.39 per ounce.<\/p>\n
\u201cYou can pretty much get the sentiment from gold. It is holding above $1,600, if there is confirmation that there are U.S. casualties, it could go higher,\u201d said Matt Simpson, a senior market analyst at Gain Capital in Singapore.
\u201cIf it does look like we\u2019ve got U.S. casualties, then I don\u2019t think Trump is going to just stand back and take that,\u201d he said. \u201cWorld War III has been thrown around. I don\u2019t think we\u2019re there yet. But it does look like Iraq II.\u201d<\/p>\n
Reports of the attack threw the market off balance after better-than-expected data in the U.S. non-manufacturing sector helped to lift the dollar overnight. Markets in Asia had bounced on Tuesday amid easing anxiety over the possibility for further escalation in the Middle East.<\/p>\n
![\"\"](\"https:\/\/images.financialexpress.com\/2020\/01\/1-62.jpg\")