SINGAPORE (REUTERS) - The US dollar rebounded from a 2½-year low on Wednesday (Aug 30) as concerns about North Korea's firing of a missile over Japan ebbed, but Asian stocks were muted despite Wall Street's higher close.
The dollar index, which tracks the greenback against a basket of six major peers, edged up 0.1 per cent to 92.34.
The dollar rose 0.15 per cent to 109.825 yen. On Tuesday, after slumping to a 4½-month low versus the safe haven currency, the greenback closed up 0.5 per cent.
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 will repatriate funds in a crisis.
The dollar was also little changed against the safe haven Swiss franc, buying 0.9555 early on Wednesday, after hitting its lowest since August 2015 in the previous session.
"Calmer heads have prevailed once again in financial markets, with traders seemingly happy to cover short positions and add a touch of risk into their portfolio," said Mr Chris Weston, chief market strategist at IG in Melbourne.
United States President Donald Trump produced "a fairly measured response (to North Korea) and the view that 'all options are on the table' suggests he is not ready to bring 'fire and fury' ", Mr Weston said, referring to Mr Trump's warning to Pyongyang earlier this month.
Markets so far seemed to be dismissing North Korea's statement on Wednesday that the test was a first step in military action in the Pacific to "contain" the US territory of Guam.
Reports of the launch by North Korean media were lacking the usual boasts of technical advances, indicating the test may not have accomplished its intended goals.
Currency traders are looking now to non-farm payrolls data for August, due on Friday.
MSCI's broadest index of Asia-Pacific shares outside Japan was flat in early trade. South Korea's KOSPI share index and Australian shares both inched up 0.1 per cent.
Japan's Nikkei rose 0.5 per cent as the yen weakened.
In commodities, gasoline hit a near-two-year high after Hurricane Harvey shut down nearly a fifth of the US's refining capacity, and more closures are expected.
US gasoline futures rose 2.25 per cent to US$1.8234, bringing gains this week to 9.4 per cent.
The rise in crude inventories as a result of refinery shutdowns, however, weighed on oil prices.
US crude futures fell 0.4 per cent in early trade to US$46.29 a barrel, after touching a five-week low on Tuesday.
Global benchmark Brent slipped 0.2 per cent to US$51.91.
Spot gold was little changed at US$1,308.55 an ounce on Wednesday. On Tuesday, the precious metal jumped to its highest level since Mr Trump was elected US president, before closing flat.