Yen, Treasuries Advance amid North Korea Jitters

Asian equities were mixed, the yen and gold extended gains, and Treasuries rallied as traders digested reports of North Korean plans for a ballistic missile launch on the heels of Sunday’s nuclear test.

Japanese stocks fell and equity indexes declined in Sydney and Seoul, while they fluctuated elsewhere as the United Nations Security Council met to discuss the threat from Pyongyang. S&P 500 Index futures swung between gains and losses before American markets reopen after the Labour Day holiday. Yields on Treasuries declined.

There is a high chance North Korea will fire an ICBM missile before the Sept. 9 foundation day after the Pyongyang regime started moving such a weapon, Asia Business Daily reported Tuesday, citing unidentified intelligence officials. North Korea was “begging for war” by testing a nuclear weapon over the weekend, the U.S. ambassador to the UN said. Nikki Haley demanded the strongest sanctions possible to bring the Kim Jong Un regime to heel.

Here are the main moves in markets:

Stocks

· Japan’s Topix index fell 0.8 percent as of 2:15 p.m. Tokyo time, while South Korea’s Kospi index lost 0.3 percent. Australia’s S&P/ASX 200 Index slipped less than 0.1 percent.

· Hong Kong’s Hang Seng Index rose 0.2 percent, with indexes also higher in China and Singapore.

· Futures on the S&P 500 Index rose less than 0.1 percent.

· The MSCI Asia Pacific Index lost 0.1 percent. It slid 0.6 percent on Monday, the steepest drop since Aug. 11.

Currencies

· The Japanese yen rose 0.3 percent to 109.36 per dollar after jumping 0.5 percent on Monday.

· The Australian dollar advanced 0.2 percent to 79.61 per dollar. It gyrated following the RBA decision. Earlier, it jumped as high as 79.85 after the net exports contribution to GDP.

· The Bloomberg Dollar Spot Index fell about 0.1 percent.

· The euro was up 0.1 percent to $1.1905 after advancing 0.3 percent Monday.

· The Swiss franc advanced 0.2 percent to 0.9559 per dollar after climbing 0.7 percent.

· The offshore yuan tumbled the most since June on a closing basis after the People’s Bank of China strengthened its daily reference by 0.45 percent to 6.5370 per dollar, weaker than expected.

Bonds

· The U.S. 10-year Treasury yield fell more than three basis points to 2.13 percent.

· Yields on Australian 10-year bonds climbed about five basis points to 2.67 percent.

Commodities

· Gold rose 0.2 percent to $1,336.53 an ounce, the highest since September 2016.

· West Texas Intermediate crude climbed 0.2 percent to $47.47 a barrel.

· Gasoline declined 4 percent to $1.6776 a gallon. It gave up some of last month’s gains as U.S. Gulf Coast refineries plan to resume operations following Hurricane Harvey-triggered shutdowns.

· Copper in London rose to a three-year high and was trading 0.3 percent higher $6,940 a metric ton.

Source: Bloomberg

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