ASIA MARKETS: Korea's Kopsi Leads Asian Stocks Lower North Korea's Nuclear Test

But Kospi made up some ground after deeper losses

Investors moved into haven assets and sold stocks in Asian trading Monday, but reactions were measured to North Korea's largest-ever nuclear test.

Initial moves into the likes of the Japanese yen slowed as the morning progressed, with price fluctuations in a number of Asian markets more pronounced last Tuesday, when North Korea fired a missile over a main Japanese island for the first time since 2009.

South Korea's Kospi fell as much as 1.7%, though it quickly pared declines and ended down 1.2%, while the South Korean won slid 0.8% against the U.S. dollar. Elsewhere, Hong Kong's Hang Seng Index fell 0.7% and Australia's S&P/ASX 200 closed 0.4%.

The yen, which gained nearly 1% at the start of trading to Yen109.30 per dollar , eased back to Yen109.85. That helped limit the Nikkei Stock Average's drop to 0.9%. Japanese stocks often fall when the yen's value rises.

Declines were even smaller in Australia and New Zealand , even as the Trump administration issued its sternest warning yet that a potential military response is on the table.

"While this is the sixth nuclear test, it is the first since Trump took office, so the market will see this as a clear escalation of tensions," said Chris Weston, chief market strategist at IG Group.

Beyond the yen, the Swiss franc also rose during Asian trading while London spot gold prices gained nearly 1%, approaching $1,340 a troy ounce and hitting fresh 11-month highs.

(END) Dow Jones Newswires

September 04, 2017 06:33 ET (10:33 GMT)