The U.S. dollar fell to the upper 109 yen range Wednesday morning in Tokyo after President Donald Trump's overnight warning to North Korea not to threaten the United States prompted market players to seek the perceived safety of the yen. The Dow slumped 204.69 points or 0.9 percent to 21,844.01, the Nasdaq plummeted 135.46 points or 2.1 percent to 6,216.87 and the S&P 500 tumbled 35.81 points or 1.5 percent to 2,438.21.
US indexes were trading at session lows on Thursday afternoon, with the Dow and the Nasdaq posting triple-digit point declines, as investors fretted over escalating tensions between the United States and North Korea.
Nine of the 11 major S&P sectors were lower, with the consumer discretionary index's 10.2 percent fall leading the decliners. The S&P hasn't moved more than 0.5 percent in one day since July and has fallen more than 1 percent only twice this year.
After pushing to fresh 2-month highs after weaker than expected US CPI data, gold prices edged lower with some hopes for diplomatic moves to ease North Korean tensions. "Although it is considered highly unlikely that this tension will escalate into a nuclear war, the market still needs to see how President Trump will eventually deal with his advocating "fire and fury" against North Korea's threat", said Margaret Yang Yan, market analyst at CMC Markets Singapore. Spot gold was up 0.1% at $1,287 per ounce by 2.17pm GMT, set for its biggest weekly gain since April.
Asian equity markets extended a global slide on Friday, sending investors fleeing to less risky assets such the yen, the Swiss franc and U.S. Treasuries.
The overall financials group, which accounts for roughly a third of the index slipped 0.9 per cent.More news: 40-year Floyd Mayweather looking ready for Conor McGregor during media workout
Shane Oliver, head of investment strategy at AMP Capital in Sydney, said: "What has changed this time is that the scary threats and war of words between the United States and North Korea have intensified to the point that markets can't ignore it".
"Gold, one of the first ports of call in times of investor anxiety, is now trading 0.56% higher at US$1268/oz", he said.
"Given the great run we've had, seems like some sort of pullback wouldn't be surprising", said Michael Baele, managing director of investments at U.S. Bank Private Wealth Management. The Nasdaq composite lost 20 points, or 0.3 percent, to 6,349. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.47 percent lower.
The U.S. dollar fell to 110.48 yen from 110.72 yen late Monday.
The euro held steady at $1.1776.
Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in USA crude inventories, leaving prices volatile. The contract fell 97 cents, or 2 percent, to close at $48.59 a barrel on Thursday.