Middle East Conflict Hits Asian Currencies, US Airline

Prolonged conflict in the Middle East, sparked by a U.S. and Israeli attack on Iran in February, has triggered widespread financial strain, with Asian currencies plunging to record lows and a major U.S. low-cost airline shutting down amid soaring energy costs.

Currencies across Asia have recorded some of the steepest declines in foreign exchange markets since the conflict began. The Indonesian rupiah hit a record low on Tuesday, while the Indian rupee and Philippine peso also reached historic lows against the U.S. dollar. Other currencies, including those of South Korea, Thailand, Malaysia, and Japan, faced heavy pressure. The Japanese yen weakened toward 160 per dollar, prompting authorities to intervene and deter speculators. Japan imports 95 percent of its oil from the Middle East, heightening its vulnerability to rising energy prices.

Asia's exposure stems from its reliance on oil shipments through the Strait of Hormuz, where about 80 percent of seaborne trade is destined for the region. Higher crude oil prices have inflated import bills for these energy-dependent economies, boosted demand for dollars, and spurred capital outflows. In India, which imports more than 80...