Published: Sat, August 12, 2017
Markets | By Noel Gibbs

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

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

Japanese markets were closed for a holiday but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe was on track to post its largest weekly drop since the week before Donald Trump won the US presidential election in November. Orders fell 4.7 percent from the previous quarter in April-June, suggesting demand is weaker than expected, though economists say the outlook for coming months is more upbeat.

Equity markets had traded with a soft tone in Europe and there was a sharp increase in selling pressure in NY with the S&P 500 index declining by close to 1.0%.

The Toronto Stock Exchange's S&P/TSX composite index closed down 143.08 points, or 0.94 percent, at 15,074.25, its lowest close since July 7.

Nevertheless, the geopolitical uncertainty looks set to continue, dealers said, following Trump's fresh warning Friday that the USA military is "locked and loaded" in the event of a misstep by the totalitarian state.

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.

North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific island territory of Guam in an unusually detailed threat.

Global shares mostly lower on rising unease over North Korea
The yeild on the benchmark 10-year Treasury yields fell as low as 2.197 percent overnight, their lowest level since June 28. The S&P 500 dropped 1.4% to 2438.21, while the Dow Jones Industrial Average fell 204.69 points, or 0.9%, to 21,844.01.


Data showed US producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week.

The pan-European FTSEurofirst 300 index .FTEU3 lost 1.11 percent.

South Korea's KOSPI fell 1.7 percent to its lowest since May 24, but its losses for the week are a relatively modest 3.2 percent.

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.

The dollar index fell 0.3 percent, with the euro up 0.36 percent to $1.1812. He said that North Korea "can be very very nervous" if it acts on either the U.S. or its allies, and warned that "things will happen to them like they never thought possible".

Japan is the world's biggest creditor nation and there is an assumption Japanese investors may repatriate their foreign holdings in times of heightened global uncertainty.

Jose Mourinho insists Manchester United's transfer activity is sufficient
Secretary, Brighton & Hove Albion Supporters' Club "I am old enough to remember the last (and only) time we were in the old First Division, from 1979 to 1983".


Benchmark 10-year notes last rose 5/32 in price to yield 2.194 percent, from 2.211 percent late on Thursday.

The 30-year bond US30YT=RR last rose 28/32 in price to yield 2.7759 percent, from 2.818 percent late on Wednesday.

The Korean won also continued to fall, down 0.45 percent to 1,147.2.

After touching a more than two-month high at US$1,291.86, spot gold last added 0.2 per cent to US$1,288.81 an ounce.

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

"The war of words between the leaders of the US and North Korea continues to dominate investor sentiment", said Forex.com technical analyst Fawad Razaqzada.

USA military denies airstrike killed civilians in Afghanistan
As the tempo of USA airstrikes continues at a rapid pace, there have been a number of such incidents in recent months. The massacre of about 50 men, women and children this week took place in the Sayad district.


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