Dollar slumps, Tokyo tanks as North Korea tensions spike

Stocks ended more than one percent down in Seoul while the won slumped to a three-week low against the dollar as the United States president and South Korea’s volatile neighbour dramatically ramped up their war of words.

Sydney was a rare bright spot in Asia-Pacific with stocks closing 0.4 percent up as Australia’s biggest bank posted record annual profits. North Korea also laid out detailed plans of how it would launch a missile strike on USA military bases in Guam (http://www.marketwatch.com/story/north-korea-details-plan-to-fire-missiles-toward-guam-says-only-absolute-force-will-work-with-trump-2017-08-09).

Meanwhile, traders absorbed a report on jobless claims (http://www.marketwatch.com/story/us-jobless-claims-rise-by-3000-to-244000-2017-08-10) that showed that initial claims for USA unemployment-insurance benefits continue to reflect a strong labor market, even as they inched slightly higher.

“We saw a tentative recovery in risk appetite yesterday from the sell off inspired by North Korea but I think, justifiably that move is fading a little bit today”, said Saxo Bank’s head of FX strategy John Hardy.

Geopolitical tensions were at the fore, after US President Donald Trump said North Korea would be “met with fire and fury” if its threats against America continued.

In commodities trading, USA crude oil was wallowing around $49 to the barrel amid speculation that a predicted gain in American output will offset OPEC-led efforts to trim a global glut.

The S&P 500 .SPX lost 5.99 points, or 0.24 percent, to close at 2,474.92 and the Nasdaq Composite .IXIC dropped 13.31 points, or 0.21 percent, to 6,370.46.

Top automaker Hyundai Motor was up 1.39 percent to 146,000 won, and top steelmaker POSCO advanced 0.59 percent to 339,500 won. U.S. Treasury yields fell in Asian time and the 10-year benchmark yield is down 2.7 basis points at 2.26 percent. The index has fallen to its lowest intraday level in well over a month.

The VIX, a measure of how much volatility investors expect in stocks, jumped 10.4 percent.

SeaWorld Entertainment slid 6.2 percent after the theme park operator reported second-quarter revenue that fell short of Wall Street’s expectations.

Michael Kors climbed 21.5 percent after the luxury handbag and apparel designer and retailer’s latest quarterly results beat analysts’ forecasts as sales improved.

OIL: Benchmark U.S. crude lost 12 cents to $48.47 per barrel on the on the New York Mercantile Exchange.

USA crude rose 0.12 percent to $49.23 per barrel and Brent was last at $52.33, up 0.36 percent on the day. The strength in the sector comes as gold for December delivery is jumping $11.30 to $1,290.60 an ounce.

Economists polled by MarketWatch had expected the government to report that initial claims for regular state unemployment-insurance benefits rose 2,000 to 242,000. Hong Kong’s Hang Seng added 0.6 percent.

In Europe, Britain’s FTSE 100 was down 1.1 percent to 7,306, while France’s CAC 40 fell 1.1 percent to 5,058.