Asian shares, United States stock futures, dollar slip on rising Korean tensions

Daily December Comex Gold

The Nikkei slumped to its lowest close for nearly three months Wednesday, leading an Asia-wide sell-off sparked by President Donald Trump's apocalyptic warning over North Korea's weapons program. While the German DAX Index has edged down by 0.1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both down by 1 percent. May 17 was the last time the three indexes had a bigger single-day decline. Seagate Technology was up 2.2 percent.

Many world stock markets have hit record or multiyear highs in recent weeks, leaving them vulnerable to a sell-off, and the tensions over North Korea proved to be the trigger.

"Of course it's all come at a time when share markets are due for a correction so North Korea has provided a ideal trigger".

The dollar last changed hands at 108.96 yen, down 0.2 percent. The Dow Jones industrial average slid 204.69 points, or 0.9 percent, to 21,844.01, just shy of its low point for the day.

December gold rose United States dollars 3.90, or 0.3 per cent, to settle at USD 1,294 an ounce.

Chinese bluechips lost 1.6 percent, while Hong Kong's Hang Seng was 1.9 percent lower.

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.

Trump's threat earlier this week, to unleash "fire and fury" on Pyongyang if it attacked, was ultimately dismissed as bluster by many investors.

Trump again cites 'military' option against North Korea
They may continue launching missile tests but they don't want a war, and the USA doesn't want military action either. Earlier this week, Trump said if North Korea made any more threats to the USA , it will be met with "fire and fury".

Trump's comments came after reports that North Korea has spurned a new round of sanctions approved by the UN Security Council. The humanitarian crisis and economic reconstruction of the Korean peninsula after such a nuclear conflict would require large-scale worldwide cooperation led by China, the USA and European Union, and would likely take over a decade to rebuild the economy.

"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 under-perform their value counterparts across developed stock markets".

Several indexes closed lower overnight. The settlement was the highest for a most-active contract since June 6.

"After today's data and commentary from Dudley, if we see even a near-miss on CPI tomorrow, I think the dollar has got quite a bit of room to sell off", Sweeting said. That's the index's lowest level in two months. "You're less than 2 percent off the high for the S&P heading into a weekend where uncertainty with North Korea still lingers".

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 will repatriate funds should a crisis materialize.

But "the yen may be expected to lose its safe haven status if U.S".

Geopolitics aside, investors were also focused on United States economic data and monetary policy, following the release of inflation data, Erlam said.

Markets are now awaiting USA consumer price data for July, due later in the session. Meanwhile, after jumping $10.80 to $1,290.10 an ounce in the previous session, gold futures are climbing $6.50 to $1,296.60 an ounce.

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