Broader Asian currencies largely pulled back on Monday, pressured by amid rising oil prices and a surge in bond yields

Most Asian currencies weakened sharply on Monday as concerns over the inflationary impact of the Iran war drove up yields and pressured risk-driven markets in Asia.

The yuan softened after economic data for April largely underwhelmed, leaving markets on edge over a continued slowdown in the world’s second-largest economy.

The yuan’s USD/CNY pair gained 0.1% on Monday, rising further from its lowest level in 2-½ years.

The yuan was pressured by data showing Chinese industrial production grew less than expected in April, while growth in retail sales plunged to an over three-year low.

Fixed asset investment– a key gauge of private and government capital spending– declined for the first time in three months in April.

The readings indicated that China’s economy remained on the backfoot despite a small boost earlier this year, with sluggish domestic demand in particular being a key weight.

Disruptions stemming from the Iran war are expected to weigh further on the world’s second-largest economy.

Broader Asian currencies largely pulled back on Monday, pressured by amid rising oil prices and a surge in bond yields.

Oil prices climbed almost 2% after an attack on a United Arab Emirates nuclear power plant.

Concerns over higher energy-fuelled inflation saw markets bet on higher global interest rates, sparking a deep sell-off in bond markets that sent yields to multi-year highs.

The yen’s USD/JPY pair added 0.1%, with Japanese 10-year bond yields surging to a 29-year high. Rising inflation spurred bets that the Bank of Japan will hike interest rates in June, although this is expected to provide only limited relief to the beleaguered yen.

The Australian dollar’s AUD/USD pair declined 0.3%. The won’s USD/KRW lagged its peers with a 0.5% rise.

The Singapore dollar’s USD/SGD pair added 0.1% after data showed the country’s non-oil exports surged more than expected in April.