Asian Markets More Sanguine in North Korea Missile Launch
- Asian markets were nervous on news of yet another North Korean missile launch
- However, investors appear to be getting used to these stories
- The Nikkei 225 was back in the green within 30 minutes
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Asian markets were cautious but sanguine Friday on news that North Korea had launched a missile which overflew Japan, suggesting that investors are becoming more inured to such events.
The unknown weapon reportedly went over the northern Japanese island of Hokkaido in the early Asian morning. It reached an altitude of 770 kilometres, before landing about 2,000 kilometres to the east. Japanese citizens were advised to take shelter and the country’s Chief Cabinet Secretary Yoshihide Suga told reporters that Pyongyang’s “repeated provocations” were “unpermissible.” This is the second time that a North Korean weapon has been launched over Japan in the past four weeks.
However, market reaction has so far been far more modest than it has been in past episodes of belligerence by the rogue state. The Nikkei 225 was actually higher about 30 minutes from the open, but Australia’s ASX 200 and South Korea’s Kospi were both down, albeit not very far. Reports suggested that blue chips were under the most pressure in Seoul as foreign investors took some money out. Gold gained too, as did US Treasury bonds, in traditional “risk off” moves.
The US Dollar was a little weaker against the Japanese Yen but, once again, to a far lesser extent than has been seen before. USD/JPY was knocked down to 109.50 level, but came back up to hover around 110.
The United Nations Security Council is due to meet later to discuss the missile launch. However, the UN has only just imposed fresh sanctions on Pyongyang, to which Friday’s events would appear to be the response.
Japanese Prime Minister Shinzo Abe has said that the international community must send Pyongyang a “strong message.”
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.