- Yen Gains on Missile Launch; Hang Seng Tumbles
The yen extended gains after North Korea said the missile it fired on Tuesday morning was an ICBM. Stocks in Asia dropped as a selloff in Hong Kong offset a rally in Sydney, while the Aussie dollar slumped as the central bank left rates unchanged.
The Japanese currency strengthened throughout the day, rebounding from Monday’s losses, after North Korea test-fired a missile. Hong Kong stocks sank the most since December, with Galaxy Entertainment Group Ltd. and Tencent Holdings Ltd. among the biggest losers, as analysts cited the selling of index futures after the Hang Seng fell below 25,500. Australian equities surged the most since November as the nation’s biggest banks rebounded from a two-day slump. Gold bounced after its biggest plunge of the year and oil halted an eight-day rally.
The missile launch escalates tensions over North Korea’s weapons programs ahead of a meeting between the leaders of the U.S. and China this week in Germany. Leader Kim Jong Unhas been pushing ahead with missile tests in a bid to develop one that can carry a nuclear warhead to the continental U.S., prompting President Donald Trump to warn him in January on Twitter that “it won’t happen!”
Australia’s central bank kept its benchmark interest rate unchanged as it waits to see if wages will respond to a burst of hiring. Sweden’s central bank weighs in later on Tuesday. Those decisions follow a more hawkish tilt from some of the world’s most influential policy makers last week that spurred some reassessment from investors on policy steps.
The dollar strengthened the most in two weeks Monday after U.S. factories powered up in June at the fastest pace in nearly three years. U.S. growth has been a key factor helping spur a surge in global equities this year and an index of emerging and developed market shares remains within earshot of a record high.
It was far from quiet as the U.S. headed into the July 4 holiday, as erroneous prices of Nasdaq stocks, including some of the world’s biggest technology companies, flooded screens. The exchange operator was conducting a test of its pricing data feed that led to some providers, including Bloomberg LP, the parent of Bloomberg News, showing exaggerated moves in shares including Apple Inc. and Microsoft Corp. that never occurred, according to spokesman Joe Christinat.
