US–Iran relations have deteriorated recently, increasing concerns over the security of critical energy infrastructure and vital shipping lanes in the Middle East. Key maritime chokepoints such as the Strait of Hormuz and Bab el-Mandeb are particularly vulnerable amid these escalating geopolitical risks.
Lloyd Chan of MUFG highlighted the growing threats posed by these tensions, emphasizing potential disruptions to oil exports and global trade flows that rely heavily on these strategic passages, according to FX Street.
For Japanese investors and markets, these developments are significant as Japan depends on stable energy supplies from the Middle East, making the FX and equities markets sensitive to any instability in the region.