Prices at the pump? Reuters/Luke MacGregor/File Photo
Prices at the pump? Reuters/Luke MacGregor/File Photo

Oil prices jumped and the yen gained against the US dollar in Asia on Friday after the United States fired multiple cruise missiles at an air base in Syria blamed for a chemical attack on civilians. Stocks fell.

Brent crude futures, the international benchmark for oil, jumped by around $1 per barrel, or almost 2 percent, to $55.78 on concern an escalation of the conflict in Syria could disrupt oil supply from the Middle East.

US President Donald Trump said he had ordered missile strikes against a Syrian airfield from which a deadly chemical weapons attack was launched earlier this week, declaring he acted in America’s “national security interest” against Syrian President Bashar al-Assad.

The U.S. dollar fell over half a yen in currency markets, while sovereign bonds and gold prices rallied.

MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.5 percent, and S&P 500 futures lost 0.3 percent.

“While President Trump had flagged a response to this week’s chemical attack in Syria, the swiftness of the response and the willingness to take action halfway through the Trump-Xi meeting caught markets a little off-guard,” said Sean Callow, senior currency strategist at Westpac in Sydney.

“There should be limited market follow-through however, with no indication at this stage that this is the start of a broad-based, sustained U.S. military campaign.”

Facing his biggest foreign policy crisis since taking office in January, Trump took the toughest direct US action yet in Syria’s six-year-old civil war, raising the risk of confrontation with Russia and Iran, Assad’s two main military backers.

Investors were already on edge as Trump met Chinese leader Xi Jinping for talks on reining in North Korea and China’s huge trade surplus with the United States.

The yen, a favoured haven in times of stress due to Japan’s position as the world’s largest creditor nation, climbed across the board. The dollar fell to 110.36 from 110.95 just before news of attacks hit dealing screens.

The dollar was otherwise unscathed, however, as it benefited from flows into safe haven U.S. Treasuries. Against a basket of currencies it was barely lower, while the euro dipped to $0.0649.

Yields on 10-year Treasury debt fell a couple of basis points to 2.31 percent, testing a chart barrier at 2.30 percent. Spot gold prices rose 0.8 percent to $1,260.50 an ounce.