Business

Stocks tumble after North Korea fires missile over Japan

Japan Financial Markets

Syndicated News
Written by Syndicated News

TOKYO, Aug 29 2017 : U.S. stock futures and Asian share markets tumbled today, while the yen jumped to four-month highs against the dollar after North Korea fired a missile over northern Japan, setting up a tense start to trading for markets in the region.

S&P mini futures ESc1 fell as much as 0.85 percent on the news before paring losses to trade 0.5 percent below its close yesterday, when it was little changed.

Japan’s Nikkei .N225 fell 0.7 percent to four-month low while South Korea’s Kospi .KS11 shed 0.5 percent, helping to drag down MSCI’s broadest index of Asia-Pacific shares outside Japan 0.3 percent.

North Korea fired a missile early today that flew over Japan and landed in the Pacific waters off the northern region of Hokkaido, South Korea and Japan said, in a sharp escalation of tensions on the Korean peninsula.

North Korea has conducted dozens of ballistic missile tests under young leader Kim Jong-Un, the most recent on Saturday, but firing projectiles over mainland Japan is rare.

“North Korea’s reckless action is an unprecedented, serious and a grave threat to our nation,” Japanese Prime Minister Shinzo Abe told reporters.

 Earlier this month, North Korea threatened to fire missiles into the sea near the U.S. Pacific territory of Guam after U.S. President Donald Trump warned Pyongyang would face “fire and fury” if it threatened the United States.

The war of words between Trump and Pyongyang caused global alarm and rocked financial markets.

“The missile flew across Japan this time, so the implications will likely be a bit different from previous ones,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

The yen rose 0.8 percent to 108.33 to the dollar, its highest since April, despite Japan’s proximity to North Korea.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world’s biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialize.

The safe-haven Swiss franc also advanced 0.5 percent to 0.9510 franc on the dollar, its highest level in about a month and rose 0.6 percent to 1.1385 per euro.

Gold also jumped 0.9 percent to $1,324 per ounce, hitting its highest level since Nov 9.

Investors also rushed to the safety of U.S. Treasuries, pushing down the 10-year yield to a two-month low of 2.124 percent.

Yesterday, U.S. shares were narrowly mixed as investors tried to assess the flooding damage caused by Tropical Storm Harvey, powerful hurricane to strike Texas in more than 50 years when it came ashore on Friday.

Going in the opposite direction, U.S. Crude oil prices hit one-month lows yesterday, on worries refinery shutdowns due to the flooding could boost inventory.

U.S. crude futures stood at $46.79 per barrel in early trade today, up 0.5 percent on the day, after having fallen to as low as $46.15 yesterday. – Reuters

 

Comments

comments

About the author

Syndicated News

Syndicated News

News sourced from Bernama, Reuters, AFP and other accredited news agencies, including credible blogsites and news portals.