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Published: Sat, April 15, 2017
Economy | By Melissa Porter

Asian stocks slip, yen and gold rise as global risks weigh

Asian stocks slip, yen and gold rise as global risks weigh

ASIA'S DAY: Japan's Nikkei 225 stock index slipped 0.3 percent to 18,747.87 as Toshiba and other big export manufacturers lost ground.

The US dollar dropped to its lowest level in the past five months against the yen as the rising geopolitical tensions drove investors away from riskier assets such as stocks to safe haven assets such as the yen, government debt, and gold. Sydney's S&P-ASX 200 retreated 0.9 percent to 5,882.40 while Seoul's Kospi added 0.5 percent to 2,139.44.

The Bank of Japan said that producer prices were up 0.2 percent on month in March - shy of expectations for a gain of 0.3 percent, which would have been unchanged from February following an upward revision from 0.2 percent.

The Chicago Board Options Exchange Volatility Index, known as Wall Street's fear gauge, reached 15.73 overnight, the highest since early November.

GLOBAL GLOOM: Investors are cautious as world events this week complicate the investment outlook.

Risks are also rising on the Korean peninsula, with US President Donald Trump warning Washington was prepared to "solve the problem" of North Korea on its own if Pyongyang's sole major ally China refused to help rein in its neighbour's nuclear ambitions.

Meanwhile, the United States has said Russian Federation is complicit in Syria's chemical weapon attack on rebels in its bloody civil war, and ahead of his arrival in Moscow, Tillerson said the reign of Syria's Bashar al-Assad is coming to an end and that he hopes Russian Federation will conclude they have aligned themselves with an unreliable partner.

"Comments by USA secretary of state Tillerson (on Russia/Syria) and by U.S. president Trump (on North Korea) confirmed the US' recent tougher stance, stressing geopolitical tensions and creating some new risk aversion", says Piet Lammens, an analyst at KBC Markets in Brussels explaining the weakness seen in the Dollar. Tensions over North Korea also weighed on investors ahead of a long weekend in many markets. Hess was the biggest gainer in the S&P 500, climbing $1.69, or 3.5 percent, to $49.74. Hong Kong's Hang Seng sank by 0.7 percent at 24,088.46, while the Shanghai Composite index rebounded to close 0.6 percent higher at 3,288.97. In an unaudited financial report, the company said there are "material events and conditions" that make it questionable whether it can continue as a going concern.

Industrial and materials companies led USA stocks modestly lower Wednesday on another day of subdued trading ahead of the long Easter holiday weekend.

"There was a lot of bids and option barriers lined up around 110 yen, so a breach of this level shows how widespread the latest dollar selling was", said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo. The euro rose to $1.0608 from $1.0588.

Most Asian stock markets were little changed Wednesday-like their counterparts in the USA and Europe this week-with benchmark indexes within 0.2% of Tuesday's closing levels.

Global benchmark Brent edged up 13 cents to $56.36 a barrel, while USA crude added 12 cents to $53.52. It closed higher Monday for the fifth day in a row, adding 84 cents, or 1.6 percent, to $53.08 a barrel.

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