"As a portfolio manager, you say, 'Do I think we'll get a war out of this?'" said Torsten Slok, chief global economist at Deutsche Bank, referring to the back and forth between North Korea and President Donald Trump.
On Thursday, the CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the US presidential election.
Johannesburg/London - Gold prices climbed to two-month highs on Friday as investors sought refuge from escalating tensions between North Korea and the United States, while bullion also received support from weak United States inflation data.
LONDON, Aug 11 (Reuters) - The dollar was pinned close to an eight-week low against the yen on Friday as escalating tension over North Korea dominated currency markets thinned out by the summer holidays in Europe and the United States. According to the Associated Press, South Korea's Kospi lost 1.7 percent, while Hong Kong's Hang Seng slid 2 percent. The slide deepened after Trump's remarks on North Korea. The index had its biggest drop since mid-May a day earlier.
The Dow Jones industrial average closed 0.9% lower on Thursday, while the S&P 500 dropped 1.5% and the Nasdaq shed 2.1%. Platinum also moved up 0.8% to $979.85, while palladium moved up a percentage point to $900.30. The major index futures are now pointing to a modestly higher open for the markets, with the Dow futures up by 21 points. The Russell 2000 index of smaller-company stocks picked up 1.69 points, or 0.1 percent, to 1,374.23.
On the US economic front, a report released by the Labor Department showed a modest uptick in consumer prices in the U.S.in the month of July.
Gold, a classic safe haven asset, was trading at around $1,292 per ounce, up more than two percent this week and near a nine-week high.
While North Korea is likely to remain in focus, a report on consumer price inflation may also attract attention on Friday, with consumer prices expected to rise by 0.2% in July.
MSCI's main index of Asia-Pacific shares, excluding Japan, was last down 0.6%.
Bond prices rose. The yield on the 10-year Treasury note slipped to 2.20 percent from 2.25 percent late Wednesday.
In terms of forex market movements, the USA currency lost significant ground relative to majors including the yen, sterling and the euro - most notably the latter one - as the news on inflation went public. The euro rose to $1.1753 from $1.1752. Odds of a Fed rate rise during the December meeting now stand at around 40% according to the CME Group's 30-day Fed Fund futures prices.