Dollar hits 8-week low vs yen, N.Korea tensions spook investors

Dollar hits 8-week low vs yen, N.Korea tensions spook investors

Dollar hits 8-week low vs yen, N.Korea tensions spook investors

Shane Oliver, head of investment strategy at AMP Capital in Sydney, said: "What has changed this time is that the scary threats and war of words between the United States and North Korea have intensified to the point that markets can't ignore it".

Trump warned North Korea again on Thursday not to strike Guam or USA allies, saying his earlier threat to unleash "fire and fury" on Pyongyang if it launched an attack may not have been tough enough. Japan was closed on a public holiday.

"There's not a great incentive to buy big".

ANALYST TAKE: "Equities look set to end this week on a downer, as geopolitical uncertainty regarding North Korea shakes volatility from its 2017 slumber", said Mike van Dulken, head of Research at Accendo Markets.

The Dow Jones Industrial Average rose 22 points, or 0.1%, to 21,867, while the S&P 500 was up 3 points to 2,440, a rise of 0.1%.

Major European markets sank in early trade Thursday after the Dow recorded its second straight negative close Wednesday, although the dollar firmed against the pound and euro ahead of USA inflation data Friday.

The pan-European Stoxx 600 ended over 1% lower to a five-month low with nearly all sectors in negative territory. The index bounced off its lowest closing level in six months.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds in a crisis.

Investors also drew some encouragement from new government data showing US inflation at the consumer level inched higher last month.

Dow Jones witnesses worst drop since May amid geopolitical tensions
The Nasdaq finished the day at 6,216.87, a slide of 135.46, while the S&P 500 lost almost 1.5 percent, ending the day at 2,438.21. The Swiss franc eased against dollar about 0.1 percent to 0.9645 per dollar, having surged about 1.1 percent on Wednesday.

"If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year", said Sireen Harajli, FX strategist at Mizuho in NY.

While the Russell 2000 index ended up 0.1 percent on the day, it was more than 5 percent below its July 25 record close and for the week it fell 2.7 percent, its biggest weekly drop since February 2016.

This increase in tension between the United States and North Korea seem to be affecting the oil prices as well as they have dropped through the $49 region and now trade just above the $48 region as of this writing and continues to look weak.

On Thursday the greenback had shed 0.8 per cent versus the yen, with the Japanese currency rallying broadly against most major currencies.

Trucking and software stocks are also seeing notable strength in mid-day trading, while steel stocks have moved sharply lower on the day.

"Given the great run we've had, seems like some sort of pullback wouldn't be surprising", said Michael Baele, managing director of investments at U.S. Bank Private Wealth Management. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.3 basis points to 2.189%.

Shares of Snap were off about 15 percent premarket following the social media company's earnings that came below estimates and a slew of price target cuts.

After touching a more than two-month high, spot gold last added 0.3 percent to $1,290.00 an ounce.

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