Wary Investors Weigh On Asian Markets After North Korean Nuclear Test

Investors moved into haven assets and sold stocks as Asian trading began Monday, but reactions were measured to North Korea’s largest-ever nuclear test.

Initial moves into the likes of the Japanese yen slowed as the morning progressed, with price fluctuations in a number of Asian markets more pronounced last Tuesday, when North Korea fired a missile over a main Japanese island for the first time since 2009.

South Korea’s Kospi fell as much as 1.7% as stock trading started there Monday, but the declines immediately started to shrink and the index was recently down 0.9%. The South Korean won slid 1% against the U.S. dollar.

The yen, which gained nearly 1% at the start of trading to Yen109.30 per dollar , eased back to Yen109.85. That helped limit the Nikkei Stock Average’s drop to 0.5%; Japanese stocks often fall when the yen’s value rises.

Declines were even smaller in Australia and New Zealand , even as the Trump administration issued its sternest warning yet that a potential military response is on the table. “While this is the sixth nuclear test, it is the first since Trump took office, so the market will see this as a clear escalation of tensions,” said Chris Weston, chief market strategist at IG Group.

Beyond the yen, the Swiss franc was also up in Asian trading while London spot gold prices gained nearly 1%, approaching $1,340 a troy ounce and hitting fresh 11-month highs. S&P 500 futures were recently down 0.4%.
Source: Dow Jones