Investors turned to safe-haven assets after North Korea fired a missile hours before Asian markets opened on Tuesday.
Investors turned to safe-haven assets and U. S. futures opened lower after North Korea fired a missile hours before Asian markets opened on Tuesday.
Geopolitical tensions returned to the fore after North Korea launched a ballistic missile that flew over Japan on Tuesday. The missile headed in the direction of the Tohoku region before falling in the sea, Japan’s NHK said. The last time a projectile from the hermit state flew over Japan was 2009, according to Reuters.
Demand for traditional safe-haven assets rose following the latest provocation from North Korea, with demand for gold and the Japanese yen picking up in the aftermath of the missile launch.
Spot gold prices rose to their highest in around 10 months on safe-haven demand. The yellow metal fetched as high as $1,322.33 an ounce after trading around the $1,290 handle earlier in the session. Spot gold last traded at $1,315.81.
Meanwhile, the Japanese currency strengthened to trade at 108.56 yen to the dollar at 7: 01 a.m. HK/SIN as investors fled to safety.
The yen had more scope to gain against the dollar due to risk aversion, BK Asset Management Managing Director of FX Strategy Kathy Lien said in a note.
