S&P mini futures fell as much as 0.85 percent on the news before paring losses a tad to trade 0.65 percent below its close yesterday, when it was little changed as investors tried to assess the fallout from Tropical Storm Harvey.
Japan’s Nikkei fell 0.9 percent to four-month low at one point while South Korea’s Kospi shed as much as 1.6 percent, helping to drag down MSCI’s broadest index of Asia-Pacific shares outside Japan 0.7 percent.
North Korea fired a missile early today that flew over Japan and landed in the Pacific waters 735 miles off the northern region of Hokkaido, in a sharp escalation of tensions on the Korean peninsula.
North Korea has conducted dozens of ballistic missile tests under its young leader Kim Jong-Un, but firing projectiles over mainland Japan is its first since 2009.
“The missile flew across Japan this time, so the implications will likely be a bit different from previous ones,” said Hirokazu Kabeya, a chief global strategist at Daiwa Securities.
North Korea threatened earlier this month to fire missiles into the sea near the US Pacific territory of Guam, a host to major US military installations, after President Donald Trump warned Pyongyang would face “fire and fury” if it threatened the United States.
The yen rose 0.8 percent to 108.33 to the dollar, its highest since April, despite Japan’s proximity to North Korea, and last stood at 108.79.
The yen tends to benefit during times of geopolitical or financial stress as Japan is the world’s biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialise.
The safe-haven Swiss franc hit a one-month high of 0.9498 franc to the dollar and last traded at 0.9523 franc on the dollar, up 0.3 percent. The Swiss currency gained 0.4 percent versus the euro to 1.1396 per euro.
The euro hit a its 2½-year high of $1.1986 and last stood at $1.1970, maintaining its uptrend after European Central Bank chief Mario Draghi did not express concern about the currency’s recent rise in his speech at Jackson Hole.
Gold also jumped 0.9 percent to $1,324 per ounce, hitting its highest level since Nov 9.