Nuclear nerves wipe $1 TRILLION off world stocks as investors take cover in safe haven assets including gold and government bonds during US-North Korea missile stand-off

Friday, August 11, 2017
By Paul Martin

Tensions over North Korea stand-off wipe $1trillion off world stocks in past week
Investors take cover in safe haven assets including gold and government bonds
It comes after Donald Trump threatened to unleash ‘fire and fury’ in North Korea

11 August 2017

The damage inflicted on world stocks this week by the escalating war of words over North Korea has topped $1 trillion, it has emerged.

American and Asian stocks have plunged with investors fleeing to safe haven assets including gold and German government bonds, seen as one of the safest financial securities in the world.

It comes as US President Donald Trump stepped up his rhetoric in the on-going North Korean nuclear missile stand-off.

Trump said his earlier pledge to unleash ‘fire and fury’ on North Korea may not have been tough enough, after Pyongyang’s state run news agency said earlier it would complete plans in mid-August to fire four missiles to land near Guam.

U.S. and Asian stocks plunged overnight, with investors instead fleeing to traditionally safer assets including German government bonds, among the best-rated and most liquid assets in the world.

Investors also took cover in the yen, the Swiss franc and gold.

With the tense mood pushing European shares down for a third day and Wall Street set to fall again, global stocks were on course for their worst week since Trump won November’s U.S. presidential election.

Now installed in the White House, Trump issued a new warning to Pyongyang on Friday, tweeting: ‘Military solutions are now fully in place, locked and loaded, should North Korea act unwisely.’

Japanese markets were closed for a holiday but the yen powered on, hitting an eight-week high of 108.91 yen to the dollar, adding to its biggest weekly gain since May.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world’s biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds should a crisis materialise.

The Swiss franc, the other traditional safety-play among currencies, has benefited too. Two weeks ago it saw its biggest weakly fall against the euro since the start of 2015. This week has seen its biggest rise since June 2016.

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