The collapse of the US-Iran ceasefire is hitting Asia hard. Again.

The region never really left the woods. It had been bracing for second-round shocks — surging food prices chief among them — so the calm around the Strait of Hormuz felt less like a resolution than a reprieve.

And that reprieve just ended. As US President Donald Trump made clear this week, the "peace deal" between Washington and Tehran was more of a vibe than a treaty.

Few investors are shocked by the resumption of hostilities. Trump's pattern — escalate, back down, escalate again — is well documented by now.

But there's a gap between war continuing in theory and war continuing in practice, and Asia is living in that perilous gap. Making things worse: gold, the trade Asian central banks had been piling into, is sliding fast and hard.

"The ceasefire between the US and Iran was always fragile, and some flare-ups were inevitable, unfortunately," says Ryan Sweet, chief global economist at Oxford Economics. "The question is whether this represents a bump in the road or whether we're emerging from the eye of the storm."

His warning: "If the peace deal breaks, and it's too early to tell, it won't just raise oil prices. It would also increase pressure on AI supply chains in Asia, force central banks to be hawkish, tighten financial conditions, and could shift the outcome of the US midterms. The cascade runs fast."

Asia sits squarely in that cascade's path. China's economy is losing steam as global demand cools and supply chains snarl. Japan's stagflation problem is getting messier, with inflation running more than five times the 0.5% growth the Bank of Japan projects this year.

South Korea, which sources roughly 70% of its oil from the Middle East, is exposed on the logistics front — the Bank of Korea sees inflation staying above 3% even with the bombing paused. India's rupee has fallen to record lows as markets punish New Delhi's twin deficits.

Indonesia is fighting its worst currency-speculator siege since the 1997-98 Asian financial crisis, for similar reasons. Both the Reserve Bank of India and Bank Indonesia are intervening heavily.

The Philippines is propping up the peso too, with an impeachment vote against Vice President Sara Duterte — amid her ongoing feud with President Ferdinand Marcos Jr. — adding political noise to market stress. All of these fault lines could reopen as Trump's Gulf war grinds on.

As Eurasia Group CEO Ian Bremmer puts it, control of the Strait of Hormuz "has always been the haziest part of the ceasefire. Washington insists the waterway should be fully open, while Tehran still exerts functional control over it. Still, neither side would seem to want a return to full-scale war."