Asian Stocks Sink Most This Year on US-North Korea Rhetoric

Persistent gold buying by local jewellers at domestic spot market stoked uptrend

Persistent gold buying by local jewellers at domestic spot market stoked uptrend

After threatening to visit "fire and fury" on North Korea, President Donald Trump said that maybe the warning "wasn't tough enough".

Below that level lies another key support level for the dollar on technical charts at 108.13 yen, a trough the greenback touched in mid-April.

The Swiss franc and Japanese yen are often sought out in times of geopolitical tension or global financial stress, partly because both countries have big current account surpluses.

The Swiss franc on Wednesday held near the day's highs after posting its biggest single-day rise against the euro since the central bank removed its cap on the currency in January 2015. "I think before the end of the year the market goes to new highs and (Treasury) yields go higher". "What we're seeing today is political tensions over North Korea and the United States. making people nervous", said Robert Pavlik, chief market strategist at Boston Private Wealth in NY. "But with the rhetoric having gone to a different level, the market just can't afford to take that risk", said BNY Mellon FX strategist Neil Mellor.

Investors are paring positions on speculation that equities, recently at multi-year highs amid record-low volatility, may tumble further as tensions escalate.

More than 430 stocks from all USA exchanges hit their lowest levels in 52 weeks or more on Thursday, the most for any session since mid-November right after Trump was elected.

Titled "Reckless game over the Korean Peninsula runs risk of real war", the editorial suggested China will stay neutral if North Korea strikes first, but will intervene if the U.S.is the first mover.

South Korea's Kospi sank 1.7 percent to 2,319.83 and Hong Kong's Hang Seng shed 1.8 percent to 26,946.81.

USA stocks closed lower on Tuesday after Trump's vow to respond aggressively to any North Korean threats triggered a late afternoon selling spree.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.6 percent in its third session of declines, heading for a 1.5 percent drop for the week. "Pretty remarkable, perhaps even extraordinary, considering", said Tim Ash, strategist at fund manager BlueBay. These mark a bucking against the 1.3% fall in Australia's benchmark index. It soared over 2 percent in the previous two sessions, and is set for a weekly gain of 2.25 percent.

The market's backstop safety asset, gold, edged up to its latest two-month high of $1,288 an ounce. They plunged 2 percent on Thursday on fears of slowing demand and lingering concerns over a global oversupply.

Away from the geopolitical drama, USA inflation data is due at 1330 GMT. A soft inflation figure below market consensus, is likely to quell expectations of higher U.S. interest rates, ultimately pressuring the Dollar.

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