Global safe-haven trades jump on escalating North Korea tensions

Global safe-haven trades jump on escalating North Korea tensions

"We likely will continue to see more tension in the region (Korean Peninsula)", Meir noted.

As the fiery rhetoric raged this week between an apparently nuclear ICBM-equipped North Korea and U.S. President Donald J. Trump, the Air Force partnered with Japanese and South Korean aircraft to run a series of drills with B-1B strategic bombers that recently deployed to the Pacific island of Guam. Earlier; Japan's benchmark stock index closed down 1.3 percent and South Korea's declined 1.1 percent.

The dollar weakened against the yen, which is often sought in times of geopolitical tension. The US currency was down 0.3 per cent at 109.94 yen, following a retreat to 109.740, its weakest since June 15th. "Meanwhile, Trump knows that a conflict in North Korea could risk a huge amount of casualties and a huge humanitarian crisis on China's doorstep". "So it reacted when the North threatened Guam", said Mitsuo Imaizumi, chief FX strategist at Daiwa Securities.

The Australian dollar, which rose to a 19-month high near 90.00 yen late in July, was down 0.6 percent at 86.77 yen after slipping to a one-month low of 86.23 yen.




The franc wasn't the only beneficiary to the risk-off sentiment sweeping markets.

LONDON, Aug 9 (Reuters) - Highly-rated government bond yields fell on Wednesday as tensions between North Korea and the United States firmed investor demand for so-called "safe haven" assets.

Among the financials, Axis Bank, HDFC Bank and ICICI Bank dropped between 0.6 percent and 1.4 percent. The common currency had lost about 0.4 percent overnight after news USA job openings surged to a record in June reinforced Friday's robust payrolls data and supported the greenback. Despite the recent depreciation, the Kiwi Dollar is ahead by more than 5% since the beginning of the year, and moving off a multi-year high at $0.7557. Concerns are that the RBNZ will attempt to jawbone the currency and turn more dovish, reinforcing the need for low rates.

The euro was down 0.1 percent at $1.175 while the dollar fell 0.6 percent to 109.68 yen.

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