North Korea talk drags stocks lower; gold, yen rise

Daily USDJPY

Daily USDJPY

Asian stocks fell across the board on Friday as the escalation in tensions surrounding North Korea continued to push investors towards safe-haven assets such as the Japanese yen, the Swiss franc and gold.

FIRE AND FURY: Keeping up his tough talk, Trump told reporters that North Korean leader Kim Jong Un's government should "get their act together" or face extraordinary trouble, and suggested his earlier threat to unleash "fire and fury" on North Korea was too mild.

Crude oil prices tumbled on the back of the selloff on Wall Street and lingering concerns over global oversupply.

President Donald Trump warning the North would be met "with fire and fury".

In currency markets, the Canadian dollar was trading at an average price of 78.71 cents United States, down 0.20 of a USA cent.

"The escalation of the geopolitical situation between the USA and North Korea is beginning to rattle investors' nerves as was witnessed in the VIX index yesterday", said Peter Cardillo, chief market economist at First Standard Financial.

In currencies, the yen rose 0.8 percent versus the greenback at 109.2 per dollar JPY=, the strongest level for the Japanese currency since mid June.

This followed comments from Trump on Tuesday night that North Korea would face "fire and fury like the world has never seen", if it continued to threaten the U.S. along with its attempts to build a nuclear warhead that could hit the western US.

In Hong Kong, shares ended lower, but developers provided support.

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The dollar came under immediate pressure and gold moved to fresh 2-month highs just above $1,290 per ounce.

According to data from Bloomberg, the price of gold rose as much as 1.59% to £1,276, while the price of silver spiked 2.61% to $16.84 as some investors looked to safe-haven assets following the growing row.

Sterling slipped below $1.30, close to a two-and-a-half-week low but it strengthened against the euro by 0.2%, following Tuesday's 10-month low. They are expected to cut North Korea's export revenues by one third. The grim mood also spread to eurozone markets, with the French CAC 40 falling 0.9%.

About 7.5 billion shares changed hands on United States exchanges, well above the 6.25 billion average for the last 20 days.

Oil also regained momentum as data pointed to declining US inventories.

Macy's (M.N) shares closed down 10.2 percent and Kohl's (KSS.N) fell nearly 6 percent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off.

In economic news, second-quarter Singapore GDP growth was revised upwards to 2.2 percent compared to the previous quarter, above an earlier estimate of 0.4 percent growth. Energy stocks fell along with crude prices as investors kept an eye on the latest company earnings and geopolitical news.

Shares of Kura Oncology (KURA) are moving higher in pre-market trading after the biopharmaceutical company priced a public offering of 7.7 million shares of its common stock at USD6.50 per share.

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