Yen firms after North Korea says considering plan to strike Guam

Yen Franc Gains May Evaporate as Quickly as They Appeared

Yen Franc Gains May Evaporate as Quickly as They Appeared

Michael Hewson, chief market analyst at CMC Markets UK, said: "The declines in USA markets started to gain traction in the afternoon session as nervousness set in after President Trump warned North Korea that they would face "fire and fury like the world has never seen", if they continued with their attempts to build a nuclear warhead, that is able to hit the western US". Both hit more than one-month lows.

The dollar fell sharply against the Swiss franc on Wednesday, with haven assets including Switzerland's currency bid higher following a verbal clash between North Korea and U.S. President Donald Trump.

The Australian Dollar was one of the losers on Wednesday after sabre-rattling between North Korea and the U.S. stoked fears of a war breaking out, which led to a massive exodus from risk into safety. At this time, there are no telltale signs to show that North Korea is to cave in to the US-led sanctions. Wall Street was poised for further losses at the opening bell, with Dow futures and the broader S&P 500 futures down 0.3 percent.

Though Hanke said he did not expect a sustained sell-off in riskier Asian assets, he added "safe assets, as a class, are probably underpriced at present".

Trump's "wording was strong. prompting (investors) to shun risk, boosting the yen and pushing the stock market down", said Mari Iwashita, chief market economist at SMBC Friend Securities.

CURRENCIES: The euro was down 0.1 percent at $1.175 while the dollar fell 0.6 percent to 109.68 yen.

Against the yen, the franc advanced to 113.75 from an early near 2-month low of 112.96.

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 investors there will repatriate funds should a crisis eventuate.

The dollar index, which tracks the greenback against a basket of six major rivals, was almost flat on the day at 93.646, remaining above last week's 15-month low of 92.548.

During the Asian session, the yen, considered a safe-haven, strengthened against the greenback, with the dollar/yen pair last trading at 110.03.

The dollar carried over its weakness from overnight trading overseas, where dollar selling gathered steam following a news report citing US intelligence officials as saying that North Korea has succeeded in making a nuclear warhead that is small enough to be mounted on its missiles.

Gold prices jumped, with futures for December delivery trading 0.86 percent higher at $1,273.40 per ounce. WTI was last trading at $49.10 a barrel while Brent was at $52.00.

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