Dollar falls below ¥110 in Tokyo on North Korea risks

(EDITORIAL from Korea JoongAng Daily on Aug. 7)

Stock markets around the world were under pressure on Wednesday amid increased tensions between the US and North Korea following comments from President Donald Trump, and big entertainment stocks were among the many decliners.

The Toronto Stock Exchange's S&P/TSX composite index fell 143.08 points to 15,074.25, with almost all of its sectors moving lower.

In earnings news, retailers were under pressure after Macy's and Kohl's each reported lower second-quarter sales, reviving worries about consumer discretionary stocks.

The technology sector was the S&P's biggest drag with a 2.2 percent drop. The greenback was down 1.1 against the franc, its worst drop in more than six weeks.

Mr. Trump's remarks on Tuesday that North Korea would face "fire and fury like the world has never seen" pushed Wall Street lower on Tuesday and drove up the VIX "fear gauge" of expected volatility on the S&P 500 higher.

Chief market analyst at CMC Markets Micheal Hewson agreed that investors have become used to tensions between the US and North Korea in recent years, but the "inexperience" of the US President has led market participants to adopt a "safety-first" approach.

"Too many past administrations have kicked the can down the road and we've finally come to the end of the road where North Korea has nuclear weapons and the means to deliver them", he said.

The 30-year bond last rose 28/32 in price to yield 2.7759 percent, from 2.818 percent late on Wednesday.

Gold prices held steady after touching their highest in more than two months on Friday and were on track for a weekly gain, buoyed as rising tension between the United States and North Korea triggered safe-haven buying.

Investors flocked to gold Wednesday against the backdrop of rising tensions between the US and North Korea, offsetting some of the broad-based declines on the commodity-heavy Toronto stock index.

"The gold market shows various signs of ambivalence and we believe that this pattern will continue into the foreseeable future", Norbert Rucker, head of macro & commodity research at Julius Baer, said in a note. Meanwhile, the price of gold, a safe haven for nervous investors, climbed $16 or 1.28 percent to $1,278.70 per ounce at noon.

The Nikkei finished down 8.97 points, or 0.1 percent, at 19,729.74, erasing early morning gains. Advanced Micro Devices gave up 62 cents, or 4.8 percent, to $12.22.

The Canadian dollar was trading at an average price of 78.67 cents United States, down 0.04 of a USA cent. US -traded Nikkei futures fell 2 percent to their lowest since mid-May.

In overseas trading, stock markets across the Asia-Pacific region saw further downside during trading on Thursday.

Selling was broad. Declining issues outnumbered advancing ones on the NYSE 6-to-1; on Nasdaq, a 3.60-to-1 ratio favored decliners.

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