The rocket test is the latest in a series of recent provocations by Pyongyang, testing US President Donald Trump, his South Korean counterpart Moon Jae-In and Japanese Prime Minister Shinzo Abe, raising fresh fears of a conflict with the nuclear-armed nation.
Regional investors ran for cover soon after opening, seeking out safe bets with the yen surging to 108.70 against the dollar from 109.26 while gold climbed 1.6 percent to near 10-month highs of $1,317.15.
The greenback had already been suffering selling pressure as expectations for another Federal Reserve interest rate hike have faded in recent weeks.
“It’s very fluid in forex markets this morning after North Korea shot a missile across Japan to land off the coast near Hokkaido,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader in Sydney.
“What’s important about the North Korean action is that it ratchets up the pressure on President Trump and Japan to respond. And that may put them squarely in a face-off with China should they respond militarily.”
Stocks were deep in the red, with Tokyo losing 0.6 percent to sit around four-month lows, Seoul 1.2 percent down and Hong Kong 0.7 percent lower.
Sydney shed more than one percent and there were also big losses in Taipei and Wellington, though Shanghai slipped just 0.1 percent.
– ‘Possible military clash’ -Japan’s Abe said the “outrageous act of firing a missile over our country is an unprecedented, serious and grave threat and greatly damages regional peace and security”.
Pyongyang last month carried out two ICBM tests that appeared to bring much of the US mainland within reach for the first time and heightened strains in the region.
At the time, Trump warned North Korean leader Kim Jong-Un of raining “fire and fury” on the country, saying Washington’s weapons were “locked and loaded”, while Pyongyang threatened to fire a salvo of missiles over Japan towards the US territory of Guam.
Hitoshi Asaoka, strategist with Asset Management One, said the missile launch “could reignite concern over a possible military clash between the US and North Korea”.
“The market can’t help it but see risk aversion strengthen. We have to look out for how the US will perceive the latest missile launch,” he told Bloomberg News.
On oil markets the key US contract West Texas Intermediate staged a small recovery after suffering a 2.7 percent sell-off Monday on the back of concerns that killer Hurricane Harvey, which slammed Texas at the weekend, would batter demand for the commodity.
– Key figures around 0230 GMT -Tokyo – Nikkei 225: DOWN 0.6 percent at 19,330.95 (break)
Hong Kong – Hang Seng: DOWN 0.7 percent at 27,669.72
Shanghai – Composite: DOWN 0.1 percent at 3,360.62
Dollar/yen: DOWN at 108.80 yen from 109.26 yen
Euro/dollar: DOWN at $1.1966 from $1.1978 at 2100 GMT
Pound/dollar: DOWN at $1.2930 from $1.2933
Oil – West Texas Intermediate: UP 23 cents at $46.80 per barrel
Oil – Brent North Sea: UP 18 cents at $52.07 per barrel
New York – Dow: FLAT at 21,808.40 (close)
London – FTSE 100: Closed for public holiday DM
Want to watch Richard Poplak’s audition for SA’s Got Talent?
Who doesn’t? Alas, it was removed by the host site for prolific swearing*... Now that we’ve got your attention, we thought we’d take the opportunity to talk to you about the small matter of book burning and freedom of speech.
Since its release, Pieter-Louis Myburgh’s book Gangster State, has sparked numerous fascist-like behavior from certain members of the public (and the State). There have been planned book burnings, disrupted launches and Ace Magashule has openly called him a liar. And just to say thanks, a R10m defamation suit has been lodged against the author.
Pieter-Louis Myburgh is our latest Scorpio Investigative journalist recruit and we’re not going to let him and his crucial book be silenced. When the Cape Town launch was postponed, Maverick Insider stepped in and relocated it to a secure location so that Pieter-Louis’ revelations could be heard by the public. If we’ve learnt one thing over the past ten years it is this: when anyone tries to infringe on our constitutional rights, we have to fight back. Every day, our journalists are uncovering more details and evidence of State Capture and its various reincarnations. The rot is deep and the threats, like this recent one to freedom of speech, are real. You can support the cause by becoming an Insider and help free the speech that can make a difference.
*No video of Richard Poplak auditioning for SA’s Got Talent actually exists. Unless it does and we don’t know about it please send it through.
The movie Cloudy with a Chance of Meatballs is titled It’s Raining Falafel in Israel.