Asian markets suffer bloodbath over escalating US, North Korea tensions

People walk past an electronic board showing stock prices outside a brokerage at a business district in Tokyo Japan

usa stock indexes opened higher for the first time in four days on Friday after tepid data pointed to benign inflation that could make the Federal Reserve cautious about raising rates again this year, even as concerns lingered over rising tensions between the United States and North Korea.

Stocks around the world sank as the threats back and forth between the US and North Korea are digested. September West Texas Intermediate crude fell $0.97, or 2%, to $48.59 a barrel on the New York Mercantile Exchange. Eastern time. The Dow Jones industrial average added 20 points, or 0.1 percent, to 21,865. It hit a 15-month low of 92.548 on August 2. Germany's DAX was flat, while France's CAC 40 fell 1.1 percent.

Geopolitical concerns took centre stage once again after President Donald Trump issued a new round of comments against North Korea.

A spokesman for the Korean People's Army said in a statement that it was "carefully examining" plans for a missile attack on the U.S. Pacific territory, which has a large U.S. military base.

Rising tensions between the United States and North Korea brought a wave of falling stock prices recently as anxious investors moved money out of equities and into the perceived safety of gold, Swiss currency and similar products.

Gold prices posted strong weekly gains (http://www.marketwatch.com/story/gold-heads-for-strong-weekly-gain-as-stock-market-exit-persists-2017-08-11) thanks to safe-haven demand.

Gold - generally regarded as a safer asset in times of uncertainty - hit its highest price for more than two months on Friday, touching $1,288.92 an ounce before slipping back.

Gold futures for December delivery climbed 1.3 percent to $1,278.50 an ounce at 9:02 a.m. on the Comex in NY.

They suggest the USA and China, a North Korean ally, could work together to de-escalate the situation. Nonetheless, most Americans (72 percent) are uneasy about the possibility of conflict with North Korea, according to a CBS News poll, and 61 percent say they are uneasy about the president's approach to the situation. BNY Mellon FX strategist Neil Mellor told Reuters that in recent years, "the market hasn't really reacted to things on the Korean Peninsula" because in the past "it [has been] largely North Korean sabre-rattling". Other regional East Asian financial markets would also be vulnerable, particularly Japanese financial markets, with risks of disruption to Northeast Asian regional trade and investment flows and manufacturing supply chains.

Markets are now awaiting US consumer price data for July, due later in the session. However, during the Q&A session the Governor said that market pricing on interest rate moves looks reasonable, also he hinted that the next move could be an increase.

Reuters data show a 22 per cent perceived chance for a rate hike after the Fed's December meeting.

At 2:19pm BST, the Comex September silver futures contract was up 2.06% or 35 cents to $17.21 an ounce, while spot platinum rose 0.80% or $7.81 to $983.26 an ounce. The Japanese currency rallied broadly against most major currencies. The pair advanced in the preceding nine out of ten trading days.

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