USD/JPY Surges as Nikkei Drops 4.25%; Oil and Geopolitics Roil FX

Asian markets saw intense risk-off trading as the Nikkei plunged 4.25% and Nasdaq futures fell 1%, driving broad safe-haven demand across JPY and CHF pairs. USD/JPY is under pressure from yen strength as investors flee risk assets amid widening US-Iran military strikes across the Gulf and Iraq. The Indian rupee is nearing record lows against the dollar despite active RBI intervention, with surging oil prices and elevated risk aversion compounding pressure on the currency. China's State Administration of Foreign Exchange issued reassurances that its FX market remains stable and resilient, though USD/CNY remains sensitive to Trump's renewed election-related claims about China, which risk destabilizing the fragile trade truce ahead of a planned Xi meeting. Oil edged higher as the conflict widened, marking its trajectory for the largest weekly gain since April. Near-term, traders should watch for further escalation in Gulf strikes and any RBI policy response. Key pairs to monitor include USD/JPY support near recent lows and USD/INR resistance at the record high.