Asia report: Markets lower as North Korea fires missile over Japan
Most markets in Asia were lower on Tuesday as investors clambered for safe-haven assets, after North Korea launched a missile over Japan during the session.
In Japan, the Nikkei 225 was down 0.45% at 19,362.55, as the safe-haven yen strengthened 0.64% to JPY 108.55 against the dollar.
The Toshiba memory chip saga also continued on Tuesday, with US memory giant Western Digital confirming it would put JPY 150bn into a JPY 2trn bid for the division, alongside consortium partners which include the Innovation Network Corporation of Japan.
Toshiba has been trying to divest its valuable memory chip division in a bid to stem an ongoing cash crisis, which resulted from the failure of its US nuclear development acquisition Westinghouse.
Western Digital is already in joint venture with Toshiba at a memory chip manufacturing facility, and protested when it was not included in earlier bids for the division.
On the mainland, the Shanghai Composite was higher, adding 0.09% to close at 3,365.63, and the smaller, technology-heavy Shenzhen Composite fell 0.24% to 1,932.06.
South Korea’s Kospi lost 0.23% to settle at 2,364.74, while the Hang Seng Index in Hong Kong was 0.35% weaker at 27,765.01.
Stocks sold off across all sectors in Seoul as investors digested the latest event in the recently tense geopolitical climate, although the losses weren’t as big as expected in some stocks.
Hyundai Motor lost 0.35%, LG Electronics was off 2.49% and Samsung Electronics was 0.04% weaker.
Defence stocks in South Korea were higher on the news, as Victek surged 7.31%.
The belligerent North Korean state fired a missile over Japan on Tuesday, with Japanese Prime Minister Shinzo Abe calling the event unprecedented and “reckless”.
According to Japanese media, the missile flew towards the Tohoku region - firing off the emergency early warning system in the area - before falling into the sea.
It was the first time Pyongyang had fired a missile over Japan in eight years.
“North Korea's firing of more missiles, this time over Japan, could be the trigger for another round of global risk off,” noted ING Asia’s head of research Rob Carnell.
Oil prices were higher during early Asian trading as ex-Hurricane Harvey continued to affect major producing regions in the southern United States, though prices turned negative as Europe took the baton on Tuesday morning.
Brent crude was last off 0.86% at $51.45 per barrel, while West Texas Intermediate fell 0.24% to $46.46.
In Australia, the S&P/ASX 200 softened 0.72% to 5,669.01, led lower by the weighty financials subindex, as well as the consumer discretionary sector.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 1.1% at 7,738.34, led lower by broadband network operator Chorus, which tumbled 7.7%.
The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.08% at AUD 1.2547, and the Kiwi - sometimes seen as a more volatile safe haven in the forex markets - strengthened 0.39% to NZD 1.3728.