Asia stocks, US$ extend slide as US-North Korea tensions intensify

A man walks past electronic boards showing Japan's Nikkei average, the Dow Jones Industrial Average and foreign exchange rates outside a brokerage at a business district in Tokyo Japan

Dudley also cautioned that "it's going to take some time" for inflation to rise to the central bank's 2 percent target even as he offered a generally positive outlook for the US economy, job market and price pressures. It was down 0.1 percent at 109.07 yen JPY= , after retreating 0.8 percent on Thursday.

South Korea's KOSPI fell 1.4 percent, taking its losses this week to almost 3 percent.

Overnight, Wall Street closed sharply lower after Trump, with fiery rhetoric, warned Pyongyang against attacking Guam or U.S. allies after it disclosed plans to fire missiles over Japan to land near the U.S. Pacific territory.

Possibly due to the lack of appetite for risk in the market, the euro suffered on Thursday, down slightly against the dollar by 0.09% at 1.1749, slipping towards a two week low.

The Federal Reserve has a 2 percent inflation target and tracks a measure that has been stuck at 1.5 percent since May despite the labor market being near full employment.

U.S. Treasury benchmark yields rebounded from six-week lows as the easing of tensions with North Korea led investors to pare back their holdings of low-risk government debt.

"Traders should closely watch global equities today, with further falls and risk aversion likely pumping more safe-haven flows into precious metals", said Jeffrey Halley, a senior market analyst at OANDA.

Wall Street opened higher on Monday, with broad gains across sectors, as investor sentiment was lifted by easing tensions in the Korean peninsula after key US officials played down the risk of an imminent war with North Korea.

U.S. Treasury yields US10YT=RR fell to as low as 2.197 percent, their lowest level since June 28, overnight.

That prompted North Korea to say it was considering plans to fire missiles at the USA island territory of Guam.

Australia's S&P/ASX 200 dropped 1.2 percent, while Japan was closed on a public holiday.

Gold was out of favor on Monday after clocking a 2.46 percent jump last week. The Japanese currency, which firmed around 1.4 percent last week, tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation.

"After the one and a half percent self-off last week, we got a bit of a investor attitude to buy the dip", Hogan said. Against a basket of major currencies, the US dollar rose 0.3 percent.

US producer prices unexpectedly recorded their biggest drop in almost a year, and the number of Americans filing for unemployment benefits unexpectedly rose last week.

Europe's main London, Frankfurt and Paris markets started between 0,5 percent and 1,1 percent lower, and Germany's ultra-safe 10-year government bonds were trading at their highest prices since June. They plunged 2 percent on Thursday on fears of slowing demand and lingering concerns over a global oversupply. It is poised to end the week down 1.9 percent.

US crude rose 0.49 percent to $49.06 per barrel after falling as low as $48.37 and Brent was last at $52.27, up 0.33 percent after hitting a low of $51.60.



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