Risk aversion creeping back into the equation

TOKYO: Tokyo stocks fell Wednesday morning, slipping below the key 20,000 level as global security concerns spiked after North Korea said it had successfully tested its first rocket capable of striking the United States.

Washington confirmed Tuesday that Pyongyang’s latest rocket test was of an intercontinental ballistic missile, ratcheting up pressure in an already tense crisis on the Korean peninsula.

It was the latest provocation by North Korean leader Kim Jong-Un who is determined to develop a nuclear weapons programme he says is needed to ward off invasion.

“With risk aversion lingering, headline risk… will dominate (the dollar-yen) flow as we head towards Friday’s G20 summit keeping topside risk in check,” Stephen Innes, senior forex trader at Oanda, said in a commentary.

The Nikkei 225 fell 0.52 percent, or 103.56 points, to 19,928.79 by the break, while the Topix index of all first-section issues was down 0.25 percent, or 4.02 points, at 1,605.68.

Traders were given few leads with European markets slightly down and Wall Street closed for the US Independence Day holiday.

The dollar fetched 112.98 yen in Asia, down from 113.28 yen in New York on Tuesday.

SoftBank was down 0.97 percent at 8,899 yen while Panasonic fell 0.16 percent to 1,498.5 yen.

Toyota rose 0.66 percent to 6,100 yen after news that June vehicle sales in China rose 10 percent on-year.

 

AFP

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes