Asian shares mixed with Japan and South Korea down on risk tension

US: Wall Street rises on Fed bets but North Korea mutes gains

The U.S. consumer-price index, set for release before Wall Street opens, will be closely monitored by investors for clues on inflation and the Fed's next move, said Mr. Kamal.

Stock market losses slowly deepened through the day. That conflict will continue to weigh on stocks, analysts believe. "Risk aversion is still very much a concern for markets", said Shaun Osborne, chief currency strategist at Scotiabank in Toronto.

He goes on to say: "In all likelihood the North Korea problem will persist for years to come, with the U.S, and increasingly China, attempting to contain and restrain Kim Jong-un".

North Korea had responded to Trump's previous promise to unleash "fire and fury", with a threat to land a missile near the U.S. Pacific territory of Guam.

The Nasdaq Composite was up 38.25 points, or 0.62 percent, at 6,255.12.

"There's not a great incentive to buy big", said Lerner of SunTrust Advisory. It is heading for a 2.5% drop for the week.

The S&P 500 has fallen 0.8% to 2,454.20 at 11:04 a.m. today, while the Dow Jones Industrial Average has declined 120.68 points, or 0.6%, to 21,928.02.

South Korean shares, which have been among the strongest performers in the world so far this year, fell 0.9 percent, while the won sank around 0.7 percent to 1,136.4 to the dollar.

Trading was thinner than usual, with Japanese markets closed for a public holiday. Earlier in Asia, Japan's benchmark Nikkei 225 slipped less than 0.1 percent, while Hong Kong's Hang Seng slid 1.1 percent. "Pretty remarkable, perhaps even extraordinary, considering", said Tim Ash, strategist at fund manager BlueBay.

He said the crisis provided a "perfect trigger" for a correction at a time when many markets - including the FTSE 100 - were at or around record highs, leaving them vulnerable to a sell-off if investors think it is time to take profits.

USA stocks inched up on Friday, returning to form after a sell-off earlier in the week triggered by tensions between the U.S. and North Korea.

The yen on Friday added to a strong weekly rally against the dollar of close to 1.5 per cent, hitting its highest versus the greenback in nearly four months, at 108.73 yen. "Gold and silver are higher, thanks mainly to their status as safe-haven commodities".

France's CAC dropped 1.6% and Germany's DAX fell 1.3%.

The market was also waiting for USA inflation data on Friday that would offer clues about the extent to which the strengthening U.S. labour market is spilling over into inflation.

"If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year", said Sireen Harajli, FX strategist at Mizuho in NY.

The franc reversed a two-week losing streak and gained 1.1% to as firm as 0.9611 per dollar. It was last up 1.2% at 1.1305 per euro. As well, producer prices in Japan rose 0.3% on month in July, a tick higher than the 0.2% gain seen and at a 2.6% gain on year, also beating expectations.

Instead, investors turned to the traditional safe-haven assets sought in troubled times, the Japanese yen strengthened 0.5 per cent to 109.73 to the dollar, an eight-week high, and the Swiss franc reversed a two-week losing streak and gained almost 1 per cent to 0.9650 per dollar.

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