Investors’ relief about North Korea’s inaction pushes Asian Stocks up

The U.S. dollar won a reprieve from risk aversion on Monday following North Korean dictator Kim Jong Un decided to hold a celebration over the weekend instead of launching another missile, tempering safe havens such as the yen and Treasuries.

Investors remained cautious over the potential financial effect of Hurricane Irma since it chewed its way up the Florida coast, knocking out power to 3 million homes and businesses statewide.

Japan’s Nikkei rose 1 percent after Pyongyang held a enormous party to congratulate the nuclear technicians and scientists who steered the nation’s sixth and largest nuclear test a week ago.

The USA and its allies were bracing for another long-range missile launching in time for the 69th anniversary of North Korea’s founding on Saturday.

The feeling of relief was sufficient to lift E-Mini stocks to the Samp;P 500 by 0.3 percent, while yields on 10-year Treasury notes rose 3 basis points to 2.09 percent.

South Korea’s most important index added 0.7 percent, while MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.1 percent.

The U.S. dollar hovered at 108.31 yen, up from Friday’s 10-month trough of 107.32. Against a basket of currencies, the dollar included 0.15 percent to 91.492 but that was uncomfortably close to last week’s 2-1/2 year low of 91.011.

The euro eased to $1.2015, having struck a high of $1.2092 on Friday amid speculation that the European Central Bank was closer to beginning a wind-back of its stimulation program.

ECB officials last week normally agreed their next move is to cut their bond purchases and discussed a variety of options, Reuters reported.

China’s central bank was also a focus in Asia after sources said it intends to scrap book requirements for financial institutions settling foreign exchange forward yuan positions with effect from Monday.

“The elimination possibly makes it easier for traders to buy the USD, easing the pressure for yuan appreciation,” said analysts at ANZ in a note.

“The change probably signals some distress about the stronger yuan and its effects on Chinese exports{}”

The dollar was last up 0.15 percent against the offshore yuan in 6.5113 yuan, off a low of 6.4437.

There were also reports Beijing was likely to shut down local crypto-currency exchanges, dealing a blow to Bitcoin’s recent leading rally.

Bitcoin was quoted down 0.3 percent at $4,215 on the BitStamp platform, off the current record high of almost $5,000.

In commodity markets, gold softened 0.7 percent to $1,337.01 an ounce and off from a one-year summit of $1,357.54.

Oil prices recovered a little ground after falling sharply on Friday amid concerns that energy demand could be hit hard by Hurricane Irma.

U.S. crude was trading 23 cents firmer at $47.71 a barrel, while Brent climbed 21 cents to $53.99.

Courtesy: The Globe And Mail

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