Most Asian currencies weakened on Wednesday after Iran fired rockets at Iraqi airbases hosting US military forces, fuelling worries that a crisis in the Middle East will escalate further, potentially disrupting oil supplies from the region.

Global markets were set on edge after a top Iranian commander in Iraq was killed by a US drone strike last week.

Crude prices, a key element impacting the currencies of major oil importers, jumped more than 2% in morning trade, and investors also piled into safe-haven assets such as gold.

ING analysts in a note said that the general risk-off sentiment should hurt those currencies reliant on overseas finance the most, such as the Indonesian rupiah and the Indian rupee.

"The obvious concern for markets, is where does this all end? The worry is that we could see more from Iran, provoking US retaliation - a scenario that cannot be ruled out given the warnings from President (Donald) Trump," the ING analysts said in a separate note.

The South Korean won depreciated more than a percent to its weakest level in nearly a month on news of the Iranian attacks, before recovering some lost ground.

South Korea, the world's fifth largest importer of crude and a current account surplus economy, is generally less impacted by oil price movements compared to other major importers of the commodity in the region such as India and Indonesia.

The Indian rupee weakened as much as 0.3%, while the Indonesian rupiah lost up to 0.5%.

The Malaysian ringgit depreciated about 0.3% while the Singapore dollar weakened marginally.

The Thai baht too came under pressure, weakening 0.3%.

Meanwhile, the movement in the Chinese yuan was relatively muted unlike its regional peers as it strengthened intermittently after the central bank lifted its midpoint to the highest in five months to reflect strong spot market gains in the previous session.

Prior to market opening, the People's Bank of China set the midpoint rate at 6.9450 per dollar, 240 pips or 0.35% firmer than the previous fix of 6.9690 and the strongest since Aug. 5.

The Taiwan dollar recovered from earlier losses in the session to trade slightly stronger.

Data released on Tuesday evening local time showed the trade-reliant island's December exports grew 4% year-on-year, beating Reuters poll expectations of 1.7%.

Taiwan is one of Asia's major exporters, especially of technology goods, and its export trend is a key gauge of global demand for technology gadgets worldwide.