Shares slip, yen and gold gain as Korea tensions escalate

People walk past an electronic board showing stock prices outside a brokerage at a business district in Tokyo

Shares slip, yen and gold gain as Korea tensions escalate

US stocks closed lower on Tuesday after Trump's vow to respond aggressively to any North Korean threats triggered a late afternoon selling spree.

A day earlier, the Standard & Poor's 500 index posted its biggest single-day drop in almost three months following Trump's warning to unleash "fire and fury" if Pyongyang continued its nuclear weapons expansion.

"The VIX index of implied future volatility on the S+P 500 index (the so-called 'fear index), jumped to a three-month high of over 15, and we saw growth-orientated stocks underperform their value counterparts across developed stock markets".

Asian shares and U.S. stock futures slipped on Wednesday and investors sought havens such as U.S. Treasuries, gold and the yen as tensions on the Korean peninsula escalated, with Pyongyang saying it is considering plans to attack Guam.

Tokyo's blue-chip index tumbled 1.3 percent to its lowest close since late May after the Dow's winning streak of nine straight records ended following Trump's sharp rhetoric of "fire and fury", with the main European bourses also opening lower Wednesday.

According to analyst Simona Gambarini, the price of gold "tends to rise in anticipation of a conflict but often falls when tensions turn into a full-blown war". Gold gained 0.54 percent to $1,266 an ounce, but that is only its highest in less than a week.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 percent, while Japan's Nikkei lost 1.3 percent as the stronger yen sapped investor appetite.

On Friday, the S&P 500 rose 3.11 points, or 0.1 percent, to 2,441.32.

Meanwhile, gold stocks bucked the downtrend, driving the NYSE Arca Gold Bugs Index up by 1.3%.

The Swiss franc eased versus the dollar on Thursday, but still held on to the bulk of hefty gains made the previous day as heightened tensions between the United States and North Korea sent investors looking for havens. This morning gold had reached $1,286.33 while gold for delivery in December rose 0.8% to $1,290.10. The Japanese yen hit an eight-week high against the USA dollar, and US -traded Nikkei stock futures dropped 2 percent to their lowest since mid May. France's CAC 40 fell 1.1 percent to 5,057.43 while Germany's DAX lost 0.5 percent to 11,953.94. Chinese blue chips closed flat but Hong Kong's Hang Seng fell 0.4 percent.

The data comes amid tepid inflation that has remained below the Fed's 2 percent target, despite low unemployment. Brent crude, the global standard, lost 23 cents to $52.14 in London. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.9 basis points to 2.212%.

Shares of USA department stores Kohl's and Macy's were weak after their results.

The dollar fell to 109.85 yen from 110.48 yen late Tuesday.

Several indexes closed lower overnight. Against the euro, the dollar is valued at $1.826 compared to yesterday's $1.1772.

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