South Korea threatens to retaliate against North's provocations

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NORTH KOREA: President Donald Trump warned North Korea of "fire and fury" this week in response to recent threats from Pyongyang, which said it was examining plans for attacking Guam, a US territory in the Pacific with a military base.

USA and British equivalents were also trading a touch above Wednesday's six-week lows.

The last time the S&P 500 fell over 1 percent was on May. 17. Bank of New York Mellon slid $2.09, or 3.9 percent, to $51.95, while Citizens Financial Group shed $1.32, or 3.8 percent, to $33.71. Even so, the close was the highest in a month.

The Pentagon said on Monday that it was reviewing bilateral ballistic missile guidelines with South Korea that could allow Seoul to have more powerful missiles as tensions with North Korea rise over its missile and nuclear programmes.

The tiny USA territory of Guam feels a strong sense of patriotism and confidence in the American military. Oil also regained momentum as data pointed to declining USA inventories.

Concerns over geopolitical risks probably led investors to pare back bearish bets against the yen and the Swiss franc, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore, referring to the gains in those currencies on Wednesday.

"This is Janet Yellen's favoured labour market indicator and could reinforce Yellen and her colleagues about the path they have set for policy normalisation", he said.

"My initial impression would be not really", Gatling said.

Most Asian currencies stumbled, with the Korean won on pace for its biggest fall in almost eight weeks.

The Standard & Poor's 500 index slipped 0.90 points, or 0.04%, to 2,474.02.

The Dow Jones industrial average lost 71 points, or 0.3 percent, to 22,013.

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Japanese stocks finished slightly lower after a choppy session on Thursday, as investors kept a wary watch on tension over North Korea ahead of Japan's long weekend.

But financial markets were jolted out of their period of calm this week after tensions between North Korea and the USA escalated, and several earnings releases disappointed. "Safe-havens are bid and markets are a little uneasy". MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.63 percent lower, while Japan's Nikkei lost 1.29 percent.

The Japanese yen strengthened 0.08 percent versus the greenback at 110.00 per dollar.

Sterling was last trading at $1.3005, up 0.12 percent on the day.

Nvidia fell $7.37, or 4.3 percent, to $164.74, while Advanced Micro Devices gave up 71 cents, or 5.5 percent, to $12.12.

Yields on core government debt fell.

Benchmark U.S. 10-year notes rose 9/32 in price to yield 2.2494 percent, from 2.282 percent late on Tuesday. Natural gas jumped 10 cents, or 3.5 percent, to $2.99 per 1,000 cubic feet.

Oil prices rose after a report showed USA refineries processed record amounts of crude in the latest week, eating into inventories.

US crude rose 0.69 percent to $49.51 per barrel and Brent was last at $52.66, up 1 percent on the day.

The $1,279 area is a key technical level, representing a downtrend that has been in force since mid-2016 when gold surged to a two-year peak of $1,374.91.

The euro was slightly up against the U.S. dollar to last trade at 1.1754, though the single currency has plunged from the highs of 1.1909 achieved last week following reports showing a strong labor market in the US.

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