Global Markets Reel as Middle East Tensions Escalate Oil Prices

Global markets took a downturn on Tuesday as tensions in the Middle East escalated and oil prices surged. The value of major assets, including shares in Toyota Motor Corp. and Panasonic Holdings Corp., plummeted due to a surge in the Japanese yen's value against the US dollar.

The yen has gained strength over the past few days, with the dollar slipping to 153.86 Japanese yen from 154.34 yen earlier. This comes as investors speculate that the US and Japanese governments may intervene to prevent further weakening of the yen.

The decline in global markets was also attributed to ongoing conflicts in the Middle East, particularly in Saudi Arabia's southern region, where Houthi attacks on oil facilities have pushed oil prices higher. Brent crude rose 1.5% to US$98.48 a barrel, while benchmark U.S. crude surged 2.5% to US$93.79 a barrel.

Norihiro Yamaguchi of Oxford Economics warned that the boost to consumption from policy measures is fading, and supply-side-driven inflation will accelerate ahead as firms pass on increased costs to consumers.