Asia-Pacific forex news on March 18, 2025, reported on the collapse of the Israel-Hamas ceasefire, with Israeli Prime Minister Benjamin Netanyahu confirming extensive strikes on Gaza. This followed Hamas’ lack of cooperation over hostage releases.
Geopolitical tensions rose further with unconfirmed reports of U.S. forces sinking an Iranian vessel, affecting market dynamics. Oil prices saw a slight increase, while gold reached a record high of over US$3,007, driven by demand for safe-haven assets.
Usd Strength And Yen Weakness
In foreign exchange markets, the USD gained strength, impacting currencies like the EUR, AUD, NZD, CAD, and GBP. USD/JPY rose above 149.50, signalling ongoing yen weakness.
Japan’s Finance Minister Katsunobu Kato commented on the rise in JGB yields, suggesting bond pricing will be determined by the market, while intervention could still be possible. The Bank of Japan is set to meet, with expectations of no policy changes amid tariff trade war concerns.
Reserve Bank of Australia Assistant Governor Sarah Hunter indicated a cautious approach to rate cuts, with attention on U.S. policy and its potential influence on Australian inflation.
Escalating conflicts in the Middle East have fed uncertainty into global markets. Netanyahu’s confirmation of heightened military action in Gaza follows failed negotiations, while reports—albeit unverified—of U.S. military actions against an Iranian vessel add another layer of tension. Commodity prices reflect these developments, with oil inching higher, though the move remains restrained. Meanwhile, gold surging past US$3,007 per ounce indicates palpable risk aversion, as markets seek stability in traditional havens.
The strengthening of the USD underscores the broad risk-off sentiment. The Euro, Australian dollar, New Zealand dollar, Canadian dollar, and British pound all dipped in response. In Japan, the yen’s weakness remains apparent, as dollar-yen touched levels beyond 149.50. Given recent trends, traders will be gauging whether intervention is a possibility after Kato’s remarks on government positioning regarding JGB yields. Though he maintained that the market would set those yields, there was no dismissal of potential action should currency movements become one-sided.
Bank Of Japan Meeting Outlook
Eyes now turn to the Bank of Japan’s upcoming meeting. Given recent warnings that trade frictions are becoming a concern, expectations lean towards policy remaining unchanged. However, with the yen under pressure, any deviation from previous commentary could trigger currency volatility.
Australia’s stance on monetary policy remains measured, with Hunter signalling careful consideration towards any rate cuts. Emphasis remains on how U.S. policy decisions filter through to Australian inflation dynamics. Interest rate adjustments from the Federal Reserve will shape expectations in the coming weeks, adding another factor for those monitoring movements across the dollar bloc currencies.
Volatility across multiple asset classes reflects shifting sentiment, and traders will need to assess how these forces shape pricing momentum going forward. The confluence of geopolitical risks, central bank stances, and broader macroeconomic considerations will determine direction in forex, commodities, and bond markets in the days ahead.
