Investors sought out havens, boosting assets such as the Japanese yen, gold and U.S. Treasurys, after North Korea fired a ballistic missile over Japan for the first time since 2009.
The launch represented an “unprecedented, grave and serious threat” to Japan, said chief government spokesman Yoshihide Suga.
Asian stocks were lower across the board in early trading, led by declines in South Korea and Australia.
The launch jolted a market that was largely listless around the world on Monday, aside from energy-related futures, as Tropical Storm Harvey battered oil-hub Texas.
Read: Dow futures fall following North Korean missile test
The yen rose nearly 1% versus the dollar
in the first several hours after the launch, with the greenback briefly falling to around ¥108.35. It was recently around ¥108.70.
Meanwhile, gold futures
gained 0.5% in Asian trading on Tuesday after having jumped more than 1% Monday to an 11-month settlement high.
And 10-year Treasury yields were recently down to 2.13% from 2.16% late Monday in New York. If maintained through Tuesday’s global trading day, the bond issue would log its lowest yield of 2017.
While “North Korea continues to test the resolve of the U.S. and…the relationship between China and the U.S.,” markets won’t react much unless the U.S. reacts with more than words, said Bryan Goh, chief investment officer for Swiss private bank Bordier & Cie in Singapore.
Most of North Korea’s missile launches this year have generated muted market reactions. “Once the market gets used to a course of action, it tends to get desensitized,” Goh said.
But Tuesday saw noticeable investor moves, in part because of the latest missile launch.
Japan’s Nikkei Stock Average
was recently off 0.7% after index futures earlier this morning indicated a possible drop triple that, as the yen reversed some of its initial gains. The benchmark had fallen 13 of the past 17 trading days, hitting a series of four-month lows.
South Korea’s Kospi
and Australia’s S&P/ASX 200
both fell 1%. Index heavyweights were hitting both, with Samsung
down 2% and more selling in Australia’s big banks weighing on the index there.
Meanwhile, both countries’ currencies were lower versus the dollar, 0.9% for the Korean won and 0.5% for the Australian dollar. The Wall Street Journal Dollar Index was recently steady overall, with Monday’s U.S. finish, in which it logged a fresh one-year low.