Asian traders cautious after sell-off as N Korea tensions linger

AFP, HONG KONG:  Asian markets struggled yesterday while the safe-haven yen and gold held gains as traders fretted over North Korea’s nuclear test at the weekend, which prompted warnings of US military action.

The US ambassador to the United Nations Nikki Haley told an emergency Security Council meeting that Pyongyang was “begging for war” and called for the “strongest possible measures” against Kim Jong-Un’s regime.

Also, US President Donald Trump and his South Korean counterpart Moon Jae-In agreed to remove limits on the payload of the South’s missiles.

The test, which North Korea says was of a hydrogen bomb, came less than a week after it fired a rocket over Japan, while Seoul said there were signs it was preparing to launch another.

At a BRICS summit on Tuesday, Russian President Vladimir Putin warned of a potential “global catastrophe” over the crisis.

Sunday’s provocative test sparked heavy selling in

Asian stocks Monday and markets were unable to stage any meaningful recovery yesterday.

Seoul ended down 0.1 per cent after shedding more than one per cent the day before, while Tokyo dropped 0.6 per cent as exporters were weighed down by the stronger yen.

Hong Kong eased 0.1 per cent and Shanghai, which managed to eke out gains Monday, added 0.1 per cent. Wellington retreated but Singapore added 0.4 per cent. Sydney finished 0.1 per cent higher.

In early European trade, London and Paris each rose 0.1 per cent while Frankfurt gained 0.2 per  cent.

“Investors in Asia have limited leads to follow,” Citigroup analysts led by Johanna Chua wrote in a client note, according to Bloomberg News.

They added that the North usually ramps up the belligerence around key anniversaries, the next of which is expected on September 9.

“Tensions linger and it’s difficult for risk aversion sentiment to disappear,” Naoto Ono, a currency analyst at Ueda Harlow in Tokyo, said in a note.

Analysts said traders will be keeping an eye on Wall Street’s reaction to the latest events, having been closed Monday for Labor Day.

On currency markets the yen extended gains against the dollar as investors sought out safety, while gold held around one-year highs.

But while tensions are high, Greg McKenna, chief market strategist at AxiTrader, said: “For now, traders and investors are taking the approach that there will be no escalation beyond words.

“Markets will react violently if a military conflict erupts on the Korean peninsula. But overnight it’s clear traders are betting that things will de-escalate.”

Asian traders cautious after sell-off as N Korea tensions linger

AFP, HONG KONG: Asian markets struggled yesterday while the safe-haven yen and gold held gains as traders fretted over North Koreas nuclear test at the weekend, which prompted warnings of US military action. The US ambassador to the United Nations Nikki Haley told an emergency Security Council meeting that Pyongyang was begging for war and called for the strongest possible measures against Kim Jong-Uns regime. Also, US President Donald Trump and his South Korean counterpart Moon Jae-In agreed to remove limits on the payload of the Souths missiles. The test, which North Korea says was of a hydrogen bomb, came less than a week after it fired a rocket over Japan, while Seoul said there were signs it was preparing to launch another. At a BRICS summit on Tuesday, Russian President Vladimir Putin warned of a potential global catastrophe over the crisis. Sundays provocative test sparked heavy selling in Asian stocks Monday and markets were unable to stage any meaningful recovery yesterday. Seoul ended down 0.1 per cent after shedding more than one per cent the day before, while Tokyo dropped 0.6 per cent as exporters were weighed down by the stronger yen. Hong Kong eased 0.1 per cent and Shanghai, which managed to eke out gains Monday, added 0.1 per cent. Wellington retreated but Singapore added 0.4 per cent. Sydney finished 0.1 per cent higher. In early European trade, London and Paris each rose 0.1 per cent while Frankfurt gained 0.2 per cent. Investors in Asia have limited leads to follow, Citigroup analysts led by Johanna Chua wrote in a client note, according to Bloomberg News. They added that the North usually ramps up the belligerence around key anniversaries, the next of which is expected on September 9. Tensions linger and its difficult for risk aversion sentiment to disappear, Naoto Ono, a currency analyst at Ueda Harlow in Tokyo, said in a note. Analysts said traders will be keeping an eye on Wall Streets reaction to the latest events, having been closed Monday for Labor Day. On currency markets the yen extended gains against the dollar as investors sought out safety, while gold held around one-year highs. But while tensions are high, Greg McKenna, chief market strategist at AxiTrader, said: For now, traders and investors are taking the approach that there will be no escalation beyond words. Markets will react violently if a military conflict erupts on the Korean peninsula. But overnight its clear traders are betting that things will de-escalate.