Economy

Japanese Yen Benefits as Geopolitical Tensions Rise

Japanese Yen Benefits as Geopolitical Tensions Rise”

The Office for National Statistics reported that overall industrial production rose 0.5% in June on the preceding month, stronger than the 0.1% that the agency had calculated in for its preliminary estimate for the second quarter, after May's production was revised to flat. The euro fell to $1.1735 from $1.1757.

"The war of words taking place between the U.S. and North Korea at the moment, which includes very real threats of action, is taking its toll on investor sentiment". Instead, he said his statement "maybe wasn't tough enough". Retailer Office Depot shares fell almost 26% after it posted a quarterly profit that missed expectations.

USA gold futures for December delivery was mostly unchanged at $1,290.50 per ounce.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting, which may shed some light on the outlook for the interest rates. Asian shares meanwhile have tracked the United States lower this morning. The dollar also slipped against the yen.

The dollar weakened against the yen, which is often sought in times of geopolitical tension.

The reclusive state raised the stakes further on Thursday with a detailed plan to send a salvo of missiles towards the USA territory of Guam.

President Donald Trump said Friday that the U.S. military was "locked and loaded", while Pyongyang accused him of driving the Korean peninsula to the brink of nuclear war.

Trading will also be moderated by a lack of legislative news from Washington as the U.S. Congress is in recess until Sept 5. The Dow slid 33.08 points, or 0.2 percent, to 22,085.34. MSCI's main index of Asia-Pacific shares, excluding Japan, was last down 0.5 percent.

"Korean tensions are pretty much the only horse in town". The benchmark Kospi tumbled 39.76 points or 1.7% to 2,319.71, its lowest level since May 24th. "Although it is considered highly unlikely that this tension will escalate into a nuclear war, the market still needs to see how President Trump will eventually deal with his advocating "fire and fury" against North Korea's threat", said Margaret Yang Yan, market analyst at CMC Markets Singapore.

Bond prices were little changed.

Hong Kong was down 1.1%. Mainland China share prices fell on worries regulators will continue to clamp down on debt.

The Shanghai composite index was down 0.8 per cent at the close of the ASX.

U.S stocks are set to open deep in the red (-0.3%).

South Koreans watch a television displaying news broadcasts reporting on North Korea at a station in Seoul today. Both the core and headline rates are expected to have risen by 0.2 percent during July.

The pound was up 0.3% against the euro at 1.1091 and down nearly 0.1% on the dollar at 1.2994.

The escalation of the rhetoric between the USA and North Korea is keeping market participants on their toes and with no fresh economic reports the price action is dictated by the headlines. Washington delivered the ultimatum after North Korea's threat of a pre-emptive military strike on the US island territory of Guam in the western Pacific.

On Thursday, North Korea's state media kept up its anti-U.S. rhetoric, saying the nation will develop a plan by mid-August to launch intermediate-range missiles at Guam.

All this on what was looking like a fairly quiet 10th anniversary of the star of the global credit crisis.

On the other hand, gold stocks showed a strong move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 1.7 percent.



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