US crude soared 4.42% to $65.47 a barrel.
Asian
shares and US treasury yields plunged on Wednesday, while gold
and oil shot higher after Iran fired rockets at an Iraqi airbase that
hosts US military forces, stoking fears of further sharp escalations
in a developing conflict.
Iran's
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 US drone strike has raised fears of a
wider war in the Middle East.
In
morning trade, MSCI's broadest index of Asia-Pacific shares outside
Japan shed 0.5%. Japan's Nikkei dropped 2.5% and Australian shares
fell 1%.
US
crude soared 4.42% to $65.47 a barrel.
"We've
moved on from how Iran will respond to now anticipating the U.S.
52-pronged response as the U.S.
military forces in the region are in a heightened state of alert
while likely preparing for war," said Stephen Innes, strategist
at AxiTrader. "It's not going to be pretty today"
The
sharp sell-off in risk assets was accompanied by steep drops in U.S.
Treasury yields as investors flocked to safety. Benchmark 10-year
Treasury notes yielded 1.7188%, down more than 10 basis points from a
U.S. close of 1.825% on Tuesday.
The
two-year yield dropped to 1.4581% compared with a U.S. close of
1.546%. The dollar also plunged against the yen, with the Japanese
currency touching its strongest point against the greenback since
October. The U.S. currency was last down 0.69% against the yen at
107.67 .
The
euro gained 0.1% on the day to $1.1161
The
flight to safety and a falling dollar supported gold, which rocked
1.91% higher on the spot market to $1,603.93 per ounce.
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