ForexLive Asia-Pacific FX news wrap: Iran-Israel exchange of missile salvos ongoing

Middle East:

• Israeli media, says Iranian attacks on Tel Aviv, Haifa heaviest barrage since war began
• 'Unprecedented' number of US Air Force aerial refueling tankers heading toward Europe (not necessarily to the Middle East, but perhaps)
• Israel has detected another wave of ballistic missiles launched from Iran
• Trump says US will continue to support Israel
• Reports that Iran tells Qatar, Oman it won’t negotiate with US ‘while under attack’
• Al Jazeera cite Iran Foreign Minister: "will prepare the ground for a return to diplomacy"
• A US official has said again that the US is not considering joining the war with Iran

China:

• China refuses to approve exports of specific rare earth metals used in US weapon systems
• China stats spokesperson: Economic recovery foundation needs strengthening
• China Industrial Output May 2025 +5.8% y/y (expected 5.9%, prior +6.1%)
• All China May new home prices -3.5% y/y (April -4.0%)
• PBOC sets USD/ CNY reference rate for today at 7.1789 (vs. estimate at 7.1854)

Other:

• ICYMI - Bank of Japan to consider halving JGB taper pace from 2026
• New Zealand surveyed economists expect turnaround to slightly better growth in year ahead
• ICYMI Trump over the weekend: said "possible" the US could get involved in Israel-Iran
• South Korea says it will provide financial and shipping support to exporters
• ICYMI - New bank loans in China rose less than expected in May
• Asking prices for UK homes show biggest June fall since 2011
• New Zealand’s Services PMI for May remains in deep contraction at 44.0 vs. prior 48.1
• USD/JPY has risen above 144.50
• Oil futures open higher to begin the new week / US equity index futures lower
• Futures trade is about to open for the new week - Israel-Iran attacks continue
• PBOC says it will will inject cash via outright reverse repos for the second time
• Trade ideas thread - Monday, 16 June, insightful charts, technical analysis, ideas
• Monday open levels, indicative FX prices, 16 June 2025

Tensions between Israel and Iran surged over Sunday and Monday, as both sides launched fresh attacks, fuelling fears of a broader regional conflict.

The Israeli Defence Forces struck missile sites in central Iran, along with Revolutionary Guard facilities in Qazvin and the Parchin military complex near Tehran. Iran responded with its most extensive missile barrage to date, with footage suggesting ballistic missile impacts at the Haifa Oil Refinery and near Tel Aviv and Jerusalem.

Gold rose for a fourth straight session to a near two-month high as safe-haven demand picked up. Oil gapped higher at the open, buoyed by reports that Israeli strikes may have targeted Iranian energy infrastructure. However, prices later retraced, filling the gap as markets assessed escalation risks.

Adding to concerns over potential regional spillover, a large-scale military airlift appears to be underway, with an unusually high number of U.S. Air Force KC-135 and KC-46 aerial refueling tankers departing from bases across the U.S. and seemingly preparing to cross the Atlantic toward Europe.

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Japanese government bond prices fell in the Tokyo morning session as inflation concerns outweighed safe-haven demand. Yields rose, tracking oil prices higher amid the Israel-Iran tensions. The Bank of Japan meets today and Tuesday, with policy expected to remain unchanged, though focus is on potential plans to slow the pace of JGB tapering from 2026. USD/JPY rose during the session.

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China’s new home prices fell at the fastest pace in seven months in May, down 0.22% from April, highlighting persistent weakness in the property sector and prompting renewed official pledges to stabilise the market.

However, the broader economic picture was less downbeat. Retail sales jumped 6.4% y/y in May – the strongest pace since December and well above expectations – helped by shopping festival promotions. The rebound in consumption offset softer-than-expected industrial output growth (+5.8%) and modest investment data. Analysts suggested further policy support remains likely, though current conditions may not yet warrant large-scale stimulus.

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The USD was broadly firmer, yen and CHF on the weaker end of the spectrum.

Other:

• Group of Seven leaders meet in Canada this week. There are many other nations in attendance, trade talks with Trump top of the agenda.
• the US Federal Reserve's Federal Open Market Committee (FOMC) meet on Wednesday
• Bank of Japan statement is due Tuesday, Japan time (see above), as always, there is no firm time scheduled for the release

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Brent update, gap and back-fill: