Interest in market risk wavers due to the intensity of the weapons clash between Israel and Palestine. The dollar, gold, and yen immediately gain prominence.

The value of various safe-haven assets has experienced an increase in trading early this week (October 9th). Market participants tend to seek safety amid the intensifying armed conflict between Israel and Palestine. XAU/USD suddenly surged by around 1% to the range of the 1850s, while the US Dollar Index (DXY) jumped by approximately 0.4% to the 106.50 range.

Over the past weekend, Hamas launched a large-scale attack from land, air, and sea into Israel. Palestinian fighters demolished the border fence in the Gaza Strip, which had confined millions of its residents in the "largest open-air prison in the world" for years. Then, they took control of several areas from Israeli occupation for the first time.

Israel immediately deployed dozens of fighter jets and mobilized 100,000 reserve troops. The retaliatory strikes destroyed various buildings in the Palestinian areas and killed hundreds of civilians.

BBC reported that more than 700 people died in Israel and over 400 in Gaza, with thousands more injured. Al Jazeera referred to this Hamas attack as "the biggest military challenge Israel has faced since 1973 when Egypt and Syria attempted to reclaim their territories occupied by Israel in 1967."

The armed conflict has the potential to escalate following clashes between Israel and Hezbollah in Lebanon on Sunday. Israel attacked in response to Hezbollah's claim of launching rockets into "occupied Lebanese territory" in solidarity with Palestine.

This situation has shaken market risk appetite, boosting the prominence of safe havens. Additionally, the US dollar was supported by the release of strong Nonfarm Payroll data last Friday.

"As you'd expect, there's a lot of uncertainty out there this morning in the markets," said Tony Sycamore, market analyst at IG Australia.

"Where some of these risk-aversion moves are going to play out in the (currency) space, the dollar will remain bid... (and) the yen should start to see some more support coming in, but potentially, that's more on the crosses."

The yen is well-known as one of the safe-haven assets, but its position tends to be pressured due to the significant interest rate differential between Japan and the United States. The safe-haven duo USD/JPY remained almost flat within the range of 149.15-149.30 during the Asian trading session. Meanwhile, GBP/JPY and EUR/JPY declined by approximately 0.5%.