Australia: Risk has once again been taken off the table and investors are seeking out safe haven assets. The AUD has been extremely volatile this morning and is at risk for further falls if the situation in Japan worsens.

[Get this delivered to your inbox for FREE. Subscribe to our daily Markets Newsletter.]

The European Union's energy chief remarked overnight that the events at Japan's nuclear energy plants could be "catastrophic", also adding that the situation appeared to be "out of control". His comments sparked some panic in the markets with further volatility predicted for today's local session. In Australia today we have the release of the RBA's March Quarter Bulletin but it is likely that this will be largely overlooked as the market will be firmly focused on international events.

Majors: The USD has hit its lowest level ever against the JPY overnight. Speculators are betting that there will be a heavy repatriation of funds back to Japan in response to the earthquake. So far there has been little real evidence of this occurring but the market is betting this will need to happen in the near future.

The focus is now on the Bank of Japan and any possible intervention in the fx markets. The BoJ was largely unsuccessful in their intervention attempts last year so it seems unlikely they would look to intervene in the markets again without the coordinated help of other central banks.

Concerns are also growing over developments in the Middle East and Europe. Moody's announced yesterday that they would be downgrading Portugal's credit rating from A1 to A3, highlighting the fact that European sovereign debt crisis is far from over. In the Middle East, protests are ongoing in Bahrain, Yemen and Libya. Equity markets were lower overnight, with the Dow down 2.0% and the FTSE down 1.7%.

More from IBT Markets:
Newsletter: To receive Global Markets update, sign up here