Asia shares up on North Korea reprieve, US dollar drops on Fed minutes

A pedestrian looks at an electric quotation board flashing stock prices on the Nikkei key index of the Tokyo Stock Exchange in Tokyo.
A pedestrian looks at an electric quotation board flashing stock prices on the Nikkei key index of the Tokyo Stock Exchange in Tokyo. PHOTO: AFP

SINGAPORE (REUTERS) - Asian stocks edged up on Thursday (Aug 17) as tensions between the US and North Korea came off the boil, while worries about President Donald Trump's ability to implement his pro-growth agenda and the Federal Reserve's concerns about low US inflation hit the dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3 per cent in early trade.

Japan's Nikkei slipped 0.1 per cent, weighed down by the yen's strength.

South Korean shares advanced 0.1 per cent after the leaders of both North Korea and the United States appeared to back off from their heated rhetoric from last week.

Trump on Wednesday praised North Korean leader Kim Jong Un for a "wise" decision not to fire missiles towards the US Pacific territory of Guam, after North Korean media reported that Kim had delayed to decision while he waited to see what the US did next.

While that helped Wall Street close in positive territory overnight, concerns on the home front left the dollar in the doldrums.

Trump announced the disbanding of two high-profile business advisory councils on Wednesday after eight executives quit in protest over his remarks blaming weekend violence in Virginia not only on white nationalists but also on anti-racism activists who opposed them.

Moreover, minutes from the Fed's July meeting released on Wednesday showed the central bank grew more wary about recent weak inflation, with some policymakers wanting to halt interest rate hikes until it was clear the trend was temporary.

"The Federal Open Market Committee minutes confirmed one thing, which is that the committee members are not on the same page and there is no clear date when the Fed will initiate the process of reducing the size of the balance sheet," Naeem Aslam, chief market analyst at Think Markets in London, wrote in a note. "Trump dissolving his major business groups makes the investment community even more pessimistic because this sets the stage for even more failure for him."

The dollar fell 0.1 per cent to 110.04 yen in early trade, extending Wednesday's 0.4 per cent slide.

The dollar index, which tracks the greenback against a basket of six major peers, was marginally lower at 93.501 after Wednesday's 0.3 per cent loss.

The euro was steady at US$1.1767, adding to its 0.3 per cent gain overnight, after the euro zone's second-quarter growth was revised to 2.2 per cent from a year earlier, from 2.1 per cent previously.

Bitcoin, which has surged over US$1,500 this month on speculative demand for the digital currency, retained most of those gains on Thursday.

It was about 0.2 per cent lower at US$4,368.73, within a whisker of its all-time high of US$4,400 touched earlier this week.

In commodities, oil prices edged up but remained close to a 3-1/2 week low touched on Wednesday as rising US production offset a decline in stockpiles by the most in a year.

US crude was about 0.1 per cent higher at US$46.85 a barrel, failing to make up Wednesday's 1.6 per cent slide.

Global benchmark Brent gained 0.25 per cent to US$50.41, after the previous session's 1 per cent drop.

Industrial metals held gains following their surge overnight, underpinned by expectations of strong global demand and tight supplies.

Benchmark zinc on the London Metal Exchange was up 0.1 per cent from its previous close at US$3,121 a tonne, having touched a decade-high of US$3,132.50 overnight.

London copper gained 0.2 per cent to US$6,541 a tonne, after hitting US$6,576.50, its highest level since November 2014, overnight.

Gold crept up 0.1 per cent to US$1,283.61 an ounce, adding to Wednesday's 0.9 per cent jump.