Asia markets pare N. Korea losses, Seoul and Tokyo end up
Seoul, Tokyo and Hong Kong stocks ended higher yesterday as traders brushed off initial concerns over North Korea’s latest missile launch while most other Asian markets managed to pare their losses.
Pyongyang fired its second rocket over Japan’s Hokkaido in less than a month, just days after the UN Security Council imposed sanctions in response to its nuclear test.
Analysts said the rocket travelled further than any other it has fired, adding to fears about the North’s ability to strike the US mainland with an atomic bomb.
The news rattled regional markets, which had started to enjoy a return to optimism after last week’s global selloff sparked by the nuclear test that fanned fears of a regional conflict. However, by the end of the day the losses had either been sharply cut back or reversed.
Seoul bounced back to end 0.4 percent higher while the Korean won also made a U-turn to sit 0.1 percent up. Tokyo maintained its gains through the day, rising 0.5 percent as the yen weakened against the dollar on a strong US inflation report. The greenback briefly broke 111 yen for the first time since early August before easing back.
And Hong Kong rose 0.1 percent but Shanghai shed 0.5 percent, Singapore lost 0.2 percent and Sydney was 0.8 percent off. Wellington and Manila were lower but Taipei rose.
In early European trade, London fell 0.3 percent, while Paris and Frankfurt were each 0.1 percent off.
“I wouldn’t necessarily say this is an escalation,” James Soutter, portfolio manager at K2 Asset Management in Melbourne, told Bloomberg News.
“This is more of a continuance of provocation. Hence markets won’t like it, but I don’t think it’s necessarily the precursor to a sustained market pullback.”