Nikkei, Taiex gain more than 1%, recover from Monday's losses
Global stocks continued to rebound Tuesday, getting a fresh lift as North Korea pulled back its threat to attack Guam.
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After days of heated rhetoric between North Korea and President Donald Trump, Pyongyang dialed back the political tensions Tuesday with North Korean state media saying Kim Jong Un had decided not to fire missiles (http://www.marketwatch.com/story/north-korea-steps-back-from-plan-to-launch-missiles-at-guam-2017-08-14) at the U.S. territory.
South Korean markets were closed for Independence Day and Japan's Nikkei led the gains in Asia with a 1.4% rise after a 1% drop on Monday. Tokyo stocks were also boosted by a pullback in the yen as the dollar moved back above the psychologically-important Yen110 level.
Still, worries over North Korea was capping the yen's strength.
"They are thinking twice because risk-off means buying yen, but Japan is too close from a geopolitical perspective," said Kyoya Okazawa, head of global markets for BNP Paribas in Japan. As such, short-yen positioning could be capping the currency Tuesday, he added.
In Taiwan, the headline Taiex index was up 1%, after having lost as much Monday, lifted by major tech companies which were seeing gains in excess of 1%.
Elsewhere, Australia's S&P/ASX 200 climbed 0.7% with strength in the country's big banks, which have a heavy weighting in the index, following more upbeat earnings news. New Zealand's NZX-50 gained 0.8% and looked poised to set another record closing high.
Asia's stock gains Tuesday were followed by strong rebounds in Europe and the U.S. as well, with the S&P 500 logging its biggest one-day gain since April at 1%.
The stock gains in Asia on Monday and early Tuesday put markets in the region on pace to erase losses suffered late last week.
Improved risk appetite also added to downward pressure on gold. The metal, which is considered a haven in times of uncertainty, ended a three-session streak of gains on Monday and London spot prices was recently down 0.5%. Bond yields were also slightly higher as investors moved into riskier assets.
Energy stocks lagged after a 2.5% slide in oil futures overnight, the biggest drop in five weeks. Although crude prices were little changed in Asian trade Tuesday, the S&P/ASX 200's energy subindex slid 0.9% and Japan Petroleum (1662.TO) fell 0.5%.
(END) Dow Jones Newswires
August 14, 2017 23:08 ET (03:08 GMT)