Global markets have remained resilient in response to the latest missile tests and threat of nuclear aggression from North Korea.
With Pyongyang having dominated headlines over the summer the latest escalation have not driven a significant rush to “haven assets” such as the yen, Swiss franc and gold but these safer markets did report a slight uptick in demand.
“While the nuclear test is a further escalation we still see war as a low probability outcome as the effects would likely be detrimental. Our view is still that we will see a continuation of regular escalations but with a low probability of war.” Andrew Kenningham at Capital Economics said
Japanese and South Korean markets were hit hardest with global equities showing a weaker bias, overall with only moderate losses.
“The market does not seem to expect the crisis to escalate into war and previous escalations have only had shortlived market effects,” Allan von Mehren, chief analyst at Danske Bank, said.