Asian shares, dollar rally as North Korea blinks
Asian shares rallied and the dollar firmed on Tuesday after North Korea`s leader signalled that he would delay plans to fire a missile near Guam, further easing tensions and prompting investors to move back into riskier assets.
MSCI`s broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> edged up 0.2 percent, with South Korea <.ks11> up 0.6 percent and Australia <.axjo> 0.7 percent.
Japan`s Nikkei stock index <.n225> rose 1.2 percent, with a tailwind from a weaker yen. The yen tends to gain in times of crisis on assumptions that Japanese investors will repatriate assets.
On Wall Street on Monday, U.S. stocks recovered from last week`s selloff, when fears of conflict between the United States and North Korea helped wipe out nearly $1 trillion from global equity markets. The S&P 500 <.spx> posted its biggest one-day percentage gain since April. [.N]
North Korea`s leader Kim Jong Un received a report from his army on its plans to fire missiles towards Guam and said he will watch the actions of the United States for a while longer before making a decision, the North`s official news agency said on Tuesday.
U.S. President Donald Trump did not have any fresh words for Pyongyang, but Defense Secretary Jim Mattis warned on Monday that the U.S. military would be prepared to intercept a missile fired by North Korea if it was headed to Guam.
"We have North Korea saying they will wait, and Trump not saying anything at all, compared to his past promise of `fire and fury,`" said Mitsuo Imaizumi, chief FX strategist at Daiwa Securities.
"That added up to good news for the dollar, bad news for the yen," he said.
The dollar was up 0.4 percent at 110.06 yen
The euro was flat on the day against the dollar at $1.1784
Against the Swiss franc
The dollar rose as traders unwound their bearish bets made last week after Friday`s disappointing U.S. inflation data dampened expectations that the Federal Reserve would raise interest rates again this year.
New York Fed President William Dudley said that it was not unreasonable to think the central bank would begin trimming its $4.2 trillion balance sheet in September and hike rates again this year, provided economic data holds up.
Crude oil futures steadied after tumbling more than 2.5 percent on Monday in volatile trade. [O/R]
U.S. crude futures
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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