Dollar at eight-week low vs yen as North Korea tensions simmer

Cornelia Mascio
Agosto 13, 2017

Tensions spiked yet further when North Korean state media later said Pyongyang was considering strikes near U.S. military installations in Guam.

The dollar rose against a trade-weighted basket of currencies on Thursday as investors consolidated positions with the low-yielding Swiss franc and Japanese yen supported amid deepending anxiety over tensions between the United States and North Korea.

Asian stock markets slumped on Friday following overnight losses on Wall Street as U.S. President Donald Trump's bellicose remarks prompted investors to unload shares in companies that have been on the rise in recent months. MSCI's main index of Asia-Pacific shares, excluding Japan, was last down 0.5 percent.

The Swiss franc reversed a two-week losing streak, rising 1 percent versus the greenback at 0.96 per dollar.

"North Korea is being used as a reason to sell Japanese stocks, just as it was used yesterday in the United States", said Soichiro Monji from Daiwa SB Investments in Tokyo.

Media giant CBS rose 1.8 percent after reporting better-than-expected second-quarter earnings as it boosted subscriptions to the network's streaming services.

All three major equity benchmarks finished sharply lower on Thursday for their worst day since mid-May, with the trifecta of indexes all tumbling for a third straight session for the first time since mid-April, amid a persistent war of words between the USA and North Korea.

Thursday also marked the worst one-day percentage drop for all three benchmarks since May 17, (http://www.marketwatch.com/story/us-stock-futures-slide-as-concerns-over-trump-grow-2017-05-17) according to FactSet data. The U.S. currency was down 0.3 percent at 109.94 yen, following a retreat to 109.740, its weakest since June 15. Chinese blue chips are about flat but Hong Kong's Hang Seng index is down 0.3 percent.

Japan is the world's biggest creditor nation and there is an assumption Japanese investors may repatriate their foreign holdings in times of heightened global uncertainty. The common currency had lost about 0.4 percent overnight after news US job openings surged to a record in June reinforced Friday's robust payrolls data and supported the greenback.

Yields on core government debt fell.

U.S. crude oil settled 0.4% lower at $49.17/bbl, as the U.S. Energy Information Administration said it forecasts U.S. crude production to average 9.9M bbl/day in 2018, the highest annual average production on record. It had recorded gains the past 10 days, CNBC reported. TMX Group Ltd was up 3.2 percent to C$68.02, while Quebecor Inc added 4.3 percent to C$45.20 and Canadian Tire Corp Ltd climbed 5.7 percent to C$149.89.

Across the Tasman Sea, New Zealand's S&P/NZX 50 added 0.2% to 7,799.64, led higher by local cargo giant Mainfreight, which was 1.8% firmer. Brent crude was up 30 cents at $53.00 a barrel.

The tech-laden Nasdaq Composite Index plummeted 135.46 points, or 2.1%, to close at 6,216.87.

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