Asia markets shaken by North Korea rhetoric

Japanese and South Korean markets were shaken in Asian trading on Wednesday after US President Donald Trump vowed to meet North Korean threats with “fire and fury like the world has never seen” and Pyongyang said its leader Kim Jong Un was considering a strike on the US Pacific territory of Guam.

Stocks in Tokyo and Seoul were lower. Japan’s broad Topix index dropped as much as 1.4 per cent, with losses across all sectors. Information technology, industrials and telecoms stocks were among the worst performers. South Korean equities were also faring badly, and Seoul’s Kospi index fell as much as 1 per cent.

Safe havens such as the yen rallied, meanwhile, with the Japanese currency gaining as much as half a per cent on the dollar to ¥109.82, where it continued to hover below the ¥110 mark for the first time since Friday.

Sovereign bonds were mostly gaining amid the moves. Yield, which moves inversely to price, on 10-year US Treasuries was down 1 basis point at 2.248 per cent. That on the equivalent Japanese note was down 1bp at 0.053 per cent.

The 10-year South Korean government bond saw yield rise 3bp to 2.321 per cent, however, as the won shed 0.9 per cent against the greenback to Won1,134.63 per dollar, near a four-week low.

Gold was benefiting from investor unease in the region, up 0.3 per cent at $1,264.94 per ounce.

Oil was also faring badly in the Asia morning session as Brent crude, the global benchmark, sank 0.5 per cent and back below the $52 mark to $51.87 a barrel. West Texas Intermediate, the US marker, was down 0.4 per cent at $48.96.

Wall Street also closed lower on Tuesday, with stocks reversing gains following Mr Trump’s remarks.

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