Asian shares and U.S. stock futures were lower on Monday as traders weighed geopolitical tensions following North Korea’s firing of four ballistic missiles into the sea near Japan’s northwest coast earlier in the day. Some of the missiles landed as close as 300 km from Japan’s coast. North Korea claims the missiles were sent as a measure of promised retaliation over the U.S.-South Korea military drills which North Korea views as a direct security threat. U.S. President Donald Trump’s national security deputies are currently reviewing the situation and weighing retaliation options which are likely to pressure the market further. Japan is also planning to reinforce its ballistic missile defenses following North Korea’s latest aggression.
Tensions were also high in Asia following South Korea’s media statement last week that criticized China for telling Chinese tour operators to stop selling trips to South Korea after the government secured land for a U.S. missile defense system. The Korean won dropped 0.4 percent in early Monday trading.
U.S stock futures also dipped 0.4 percent during Monday’s Asian session, a relatively large movement for this trading period. Japan’s Nikkei 225 lost 0.5 percent, though the MSCI’s broadest index of Asia Pacific shares outside Japan did manage to secure 0.2 percent gains.
Traders are also eying the U.S. following Federal Reserve Chair Janet Yellen’s speech on Friday which sent expectations for a March rate hike soaring. The dollar eased 0.3 percent against the yen on Monday to 113.77, while the euro dipped 0.1 percent to $1.0608.