Asian stocks lower as US-North Korea nuclear tensions rise

Federal Hall's George Washington statue stands near the flag-covered pillars of the New York Stock Exchange. U.S. stock indexes edged lower in early trading Tuesday pulling back from the market's most recent

Simmering tensions between the USA and North Korea have come back to the boil in recent days after Pyongyang disclosed plans to fire missiles over Japan to land near America's Pacific territory of Guam. Thursday's producer-price index came out tepid, analysts said.

Financial markets have tended to quickly shake off North Korea's periodic saber-rattling in the past, dismissing it as bluster, but tensions have lingered this year amid signs that it is making progress in its ballistic missile program and on Trump's growing frustration with Pyongyang.

The Standard & Poor's 500 index fell 20 points, or 0.8 percent, to 2,453 as of 10:09 a.m.

The ongoing political crisis that has seen North Korea state it was seeking to strike the US Pacific island territory of Guam within days, prompted gold speculator Dennis Gartman, editor and publisher of The Gartman Letter to say he believed gold was on the cusp on a significant break out.

A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalisation drop from a record high US$61.36 trillion on Monday to US$60.43 trillion at the close on Thursday.

But the yen added to an already-strong weekly rally of close to 1.5 percent, hitting its highest in nearly four months versus the dollar at 108.73 yen. Spot gold added 0.7 percent to $1,286.00 an ounce.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7 percent, while Japan's Nikkei lost 1.4 percent as the stronger yen sapped investor appetite. Wall Street was poised for a soft opening with S&P futures and Dow futures both down 0.2 percent.

Australian shares were down 1.3 percent, set for a weekly loss of 0.6 percent and Chinese and Hong Kong bluechips lost 1.6 percent and 1.9 percent respectively. "Gold and silver are higher, thanks mainly to their status as safe-haven commodities". Banks and retail chains were also among the big decliners. The 30-year bond was last up 4/32 in price to yield 2.7871 per cent, from 2.794 per cent late on Thursday.

U.S. producer prices Thursday disappointed, as traders await consumer price inflation figures later Friday.

"Exposure to the Swiss franc and Japanese yen perhaps best comes through ownership of global stock and bond market funds, or through currency Liquidity funds".

Sterling was last trading at US$1.3007, up 0.25 per cent on the day.

Excluding food and energy prices, core consumer prices still crept up by 0.1% in July, matching the increases seen in the three previous months.

Traders turned towards safe-haven assets such as gold, helping the precious metal touch a two-month high, and the Japanese Yen rose.

US crude fell 0.41 percent to $48.39 per barrel and Brent was last at $51.68, down 0.42 percent on the day.

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