Asia Pacific markets retraced some losses on Wednesday after tumbling when reports said rockets were fired at an Iraqi airbase that hosts American troops.

In Japan, the Nikkei 225 eased from earlier declines of more than 2% to trade down 1.33% while the Topix index was down 1.26%. Japanese Prime Minister Shinzo Abe is said to cancel a scheduled trip this weekend to the Middle East, according to a local broadcaster, Reuters reported.

South Korea’s Kospi index was 0.83% after earlier falling more than 1.2%. Australia’s S&P/ASX 200 dropped 0.32% in the afternoon.

U.S. stock futures declined Tuesday night, with the Dow Jones Industrial Average futures down 92 points and indicated a loss of 114.68 points at Wednesday’s open. Earlier, it fell more than 400 points before stabilizing.

Chinese mainland markets traded lower: The Shanghai composite index was down 0.57%, the Shenzhen composite fell 0.11% and the Shenzhen component erased losses to trade near flat.

Hong Kong’s Hang Seng index was down 0.73%. In Singapore, the Straits Times index fell 0.77% — Singapore Airlines shares were down 1.22% as the carrier said it is diverting all of its flights in and out of Europe from Iranian airspace.

Military officials in the U.S. told NBC News the Al Asad airbase, located in western Iraq, has come under attack, with multiple projectiles hitting it.

The Pentagon later confirmed the report, saying in a statement: “Iran launched more than a dozen ballistic missiles against U.S. military and coalition forces in Iraq. It is clear that these missiles were launched from Iran and targeted at least two Iraqi military bases hosting U.S. military and coalition personnel at Al-Assad and Irbil.”

That development came amid U.S.-Iran tensions. U.S. President Donald Trump announced last week that the U.S. had killed Iran’s top military commander in Baghdad, Gen. Qasem Soleimani. Iran promised retaliation after the attack.

Investors did not expect such a swift move from Iran, a senior macro strategist told CNBC’s “Street Signs” on Wednesday.

“Clearly, it’s a surprise that we’ve had this retaliation by the Iranian side so quickly. Most investors expected that any retaliation would be drawn out, didn’t expect such a sudden re-escalation of tensions,” Mansoor Mohi-Uddin from Natwest Markets said. He added that market watchers will now wait and see how the United States responds to the attacks.

“We have a little bit of a gap now before Europe (market) opens, where things actually may calm down a little bit. The markets might become a bit more rangebound,” he added.

Oil and gold prices jump

Oil prices jumped following news of the development.

U.S. crude futures rose 1.32% to $63.53 a barrel around 11:37 a.m. HK/SIN, after earlier jumping 4%. Global benchmark Brent was up 1.38% to $69.21.

Energy names in the region gained: In Australia, Santos shares were up 1.02%, Oil Search rose 1.15% and Woodside Petroleum added 1.29%.

Spot gold was also up 1.15% to around $1,592 an ounce, after earlier rising above 2%. Gold futures for February delivery were up 1.23% to $1,593.7. The precious metal is considered a safe haven asset.


The U.S. dollar index, which tracks the greenback against a basket of its peers, fell 0.12% to 96.891, down from an earlier high of 96.925.

The Japanese yen, another safe-haven asset, traded at 108.34 versus the greenback around 11:28 a.m. HK/SIN. Earlier in the day, the yen strengthened to levels around 107.63 per dollar.

In the past, news similar to today’s Iranian attacks drew a much stronger reaction in the yen, according to Mohi-Uddin. “That probably tells you that those two currencies may not be the best indicators of how the market’s perceiving this.”

The Australian dollar was last at around $0.6868, climbing from an earlier low around $0.6847.

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