Tensions between China and Taiwan have once again become a major focus of global markets, amid escalating military activity and diplomatic pressure in the Asia-Pacific region. This situation has sparked concerns about regional stability, given the potential for a conflict to involve major powers such as the United States and Japan.

For financial markets, this geopolitical escalation has heightened investor caution. Riskier assets such as Asian stocks tend to be under pressure, while market volatility increases as investors reassess their risk exposure to the region.

Conversely, safe-haven assets such as gold, US government bonds, and the Japanese yen typically experience inflows when tensions escalate. This pattern reflects investors' efforts to protect their portfolios from geopolitical uncertainty.

Tensions between China and Taiwan have also drawn attention from international institutions as they could trigger a ripple effect on global trade and global economic stability. As long as there is no clarity on the direction of de-escalation, markets are expected to remain sensitive to any new developments. (cay)

Source: Newsmaker.id