TOKYO, Aug 29, 2017 (BSS/AFP) – Tokyo stocks fell in early Tuesday trading after North Korea launched a missile over Japan that the country’s prime minister described as an “unprecedented, serious and grave threat”.
Nuclear-armed North Korea’s launch of a ballistic missile into the Pacific Ocean is seen as a major escalation by Pyongyang, sending tensions over its weapons ambitions surging.
Japan’s Prime Minister Shinzo Abe denounced the missile test, calling for an emergency UN Security Council meeting.
“Their outrageous act of firing a missile over our country is an unprecedented, serious and grave threat and greatly damages regional peace and security,” he told reporters in Tokyo.
Hitoshi Asaoka, strategist with Asset Management One, said the missile launch “could reignite concern over a possible military clash between the US and North Korea”.
“The market can’t help it but see risk aversion strengthen. We have to look out for how the US will perceive the latest missile launch,” he told Bloomberg News.
Tokyo’s benchmark Nikkei 225 index lost 0.70 percent, or 136.93 points, to sit at 19,312.97 in early trade while the Topix index of all first-section issues was down 0.55 percent, or 8.78 points, at 1,591.34.
Abe, coming out of a telephone talk with the US president, told reporters that he and Trump agreed to hike pressure on North Korea.
The Japanese currency, which draws buying in times of uncertainty, rose immediately after the news on the North Korean missile.
The yen was changing hands at 108.67 to the dollar, much stronger than the 109 yen range seen before the missile launch.
A strong yen clouds Japanese exporters’ outlooks as it makes them less competitive abroad and reduces their repatriated profits.
Official data released Tuesday showed domestic consumption was was still feeble although the overall economy is picking up steam thanks partly to robust exports.
Japan’s household spending in July slipped 0.2 percent from a year earlier, reversing a 2.3 percent increase in June, the internal affairs ministry said.
In stocks trade, carmakers fell on a strong yen.
Toyota fell 0.60 percent to 6,089 yen and Honda down 0.26 percent to 3,037 yen.
Banks were also lower with Mitsubishi UFJ falling 0.59 percent at 653.7 yen.